The Herald Bulletin

Morning Update

Nation & World

August 20, 2013

Creditors file objections to Detroit bankruptcy

DETROIT — The city's biggest employee union, retirees and even a few dozen residents filed objections Monday to Detroit's request for bankruptcy protection, the largest municipal filing in U.S. history and a move aimed at wiping away billions of dollars in debt.

The filing by the American Federation of State, County & Municipal Employees Michigan Council 25 also came before expected objections from two city pension systems, bond holders, banks and others who hope to convince federal Judge Steven Rhodes not to allow the Chapter 9 petition by Detroit emergency manager Kevyn Orr.

Rhodes set Monday as the eligibility objection deadline. Attorneys for large creditors have until just before midnight to file objections electronically. Individual creditors who fear losing their pensions and paying more for health care began filing objections Monday in person at the court.

By early Monday evening, more than 100 objections had been filed including those made by several smaller city unions.

Since 1954, 29 of 62 municipal bankruptcies pursued in the U.S. have been dismissed.

The AFSCME, the AFL-CIO and city retirees claim in their objection that Michigan's emergency manager law — which gives Orr his authority — impairs vested pension rights violating the state Constitution. They also claim Orr did not negotiate in good faith with city creditors and that he has not yet proved Detroit is insolvent.

"The city, led by its unelected, politically appointed emergency manager ... hastily commenced this unconstitutional, unlawfully authorized Chapter 9 proceeding seeking the haven of bankruptcy to illegally attempt to slash pension and other post-employment benefit obligations and cram such reductions down the throats of current and former city employees such as the AFSCME Detroit Employees," read their objection.

Orr, hired in March by the state to fix Detroit's finances, has said there are no other options for Detroit. The city's budget deficit has hovered near or above $300 million during the past few years,

Text Only
Nation & World
More Resources from The Herald Bulletin
AP Video
13 Struck by Lightning on Calif. Beach Baseball Hall of Famers Inducted Israel, Hamas Trade Fire Despite Truce in Gaza Italy's Nibali Set to Win First Tour De France Raw: Shipwrecked Concordia Completes Last Voyage Raw: Sea Turtle Hatchlings Emerge From Nest Raw: Massive Dust Storm Covers Phoenix 12-hour Cease-fire in Gaza Fighting Begins Raw: Bolivian Dancers Attempt to Break Record Raw: Israel, Palestine Supporters Rally in US Raw: Air Algerie Flight 5017 Wreckage Virginia Governor Tours Tornado Aftermath Judge Faces Heat Over Offer to Help Migrant Kids Kangaroo Goes Missing in Oklahoma More M17 Bodies Return, Sanctions on Russia Grow Raw: Deadly Tornado Hits Virginia Campground Ohio State Marching Band Chief Fired After Probe Raw: Big Rig Stuck in Illinois Swamp
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Helium debate
Helium