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Detroit's bankruptcy filing being challenged in court

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A image of the Detroit skyline is seen on the podium where Detroit Emergency Manager Kevyn Orr and Michigan Governor Rick Snyder addressed the media about filing bankruptcy for the city of Detroit during a news conference in Detroit, Michigan July 19, 2013.
Credit: Reuters/ Rebecca Cook
A image of the Detroit skyline is seen on the podium where Detroit Emergency Manager Kevyn Orr and Michigan Governor Rick Snyder addressed the media about filing bankruptcy for the city of Detroit during a news conference in Detroit, Michigan July 19, 2013. Credit: Reuters/ Rebecca Cook

LANSING (WKZO) -- An Ingham County judge’s attempt to block the bankruptcy filing made by the City of Detroit may have come too late.

Judge Rosemarie Aquilina ruled Friday that Governor Rick Snyder and Emergency Manager Kevyn Orr must withdraw the filing and halt any attempt to pursue it because in her opinion, it violates the constitutional rights of pensioners.

Attorneys for Detroit's pension funds claim the pensions of retirees and current employees in Detroit are protected. Michigan Attorney General Bill Schutte has filed an appeal on behalf of Governor Snyder.

It is generally believed that a federal bankruptcy filing trumps local contracts. The fate of those pensions would then be up to the bankruptcy judge.

The "Detroit News" says Thursday's bankruptcy filing was a race to the courthouse. Emergency Manger Kevyn Orr has said since that part of the impetus for the bankruptcy filing was because of the threat of lawsuits.

The filing for bankruptcy protection reportedly arrived at a federal courthouse just five minutes before another rival motion arrived at a state courthouse seeking to block it.

Detroit has about 18 billion dollars in long-term debt.

 

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