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Union: Detroit's bankruptcy case ruled illegal by Ingham County court
By Caroline Salls
Pittsburgh, July 19 - The City of Detroit's Chapter 9 bankruptcy was ruled illegal by an Ingham County, Mich., court, according to a statement from the American Federation of State, County and Municipal Employees (AFSCME) president Lee Saunders.
Saunders said AFSCME members challenged Michigan governor Rick Snyder in court "over the unlawful bankruptcy authorization that cleared the way for Detroit emergency manager Kevin Orr to attack public worker pensions."
Saunders said the judge ruled against Snyder and Orr and accused them of using bankruptcy as a backdoor around the state constitutional protection of pension benefits.
"We urge Snyder and Orr to immediately abandon their course of action and to follow the judge's order directing the emergency manager to immediately withdraw the Chapter 9 petition and to not authorize any further Chapter 9 filing that threatens to diminish or impair accrued pension benefits," Saunders said.
As previously reported, the General Retirement System and the Police and Fire Retirement System of the City of Detroit announced Thursday that they filed a civil action against Orr and Snyder in the Ingham County Circuit Court, Lansing, Mich., in an effort to block the city's bankruptcy filing.
In the suit, the retirement systems challenged the authority of the emergency manager and governor to approve bankruptcy proceedings for Detroit "that would in any way impair the accrued financial benefits of the retirement systems' plan participants and beneficiaries."
By allowing any impairment, the lawsuit claims that the emergency manager and the governor would be in violation of their respective oaths of office, which require them to support and uphold the Michigan Constitution.
Detroit filed bankruptcy on July 18 in the U.S. Bankruptcy Court for the Eastern District of Michigan under Chapter 9 case number 13-53846.
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