Nation & World

Judge urges compromise in Detroit bankruptcy case

Sharon Levine, attorney representing the American Federation of State, County and Municipal Employees addresses the media outside federal court in Detroit, Tuesday, Dec. 3, 2013, after a judge ruled on the city's bankruptcy filing. Levine said city officials got "absolutely everything" in Judge Steven Rhodes' decision and planned an appeal. "It's a huge loss for the city of Detroit," she said.
Sharon Levine, attorney representing the American Federation of State, County and Municipal Employees addresses the media outside federal court in Detroit, Tuesday, Dec. 3, 2013, after a judge ruled on the city's bankruptcy filing. Levine said city officials got "absolutely everything" in Judge Steven Rhodes' decision and planned an appeal. "It's a huge loss for the city of Detroit," she said.

DETROIT (AP) — A judge urged Detroit and its creditors to keep negotiating Thursday in a 150-page opinion that mimics his decision earlier this week that the city is eligible for a makeover in bankruptcy court.

Judge Steven Rhodes didn't break new ground since announcing the decision Tuesday during a 90-minute address to a packed courtroom. But a written opinion was necessary, especially for unions and pension funds that are pursuing appeals.

Rhodes said Detroit is eligible for Chapter 9 protection because the city is broke and any negotiations with thousands of creditors before the July filing would have been impossible. As part of his ruling, he found pensions are like any other contract and can be broken in bankruptcy, despite protections in the Michigan Constitution.

Detroit emergency manager Kevyn Orr has said the city can't afford $18 billion in long-term debt, including a $3.5 billion shortfall in two pension funds. Pensions for 23,000 retirees could be cut. Private mediation between the city and creditors has been going on for weeks but now has a more urgent tone.

"The court reminds all interested parties that this eligibility determination is merely a preliminary matter in this bankruptcy case. ... The court strongly encourages the parties to begin to negotiate, or if they have already begun, to continue to negotiate, with a view toward a consensual plan," Rhodes said.

The judge hasn't responded yet to requests that the 6th U.S. Circuit Court of Appeals immediately take the case.

Loading more

Digital Access

Digital Access
Access nwherald.com from all your digital devices and receive breaking news and updates from around the area.

Home Delivery

Home Delivery
Local news, prep sports, Chicago sports, local and regional entertainment, business, home and lifestyle, food, classified and more! News you use every day! Daily, weekend and Sunday packages.

Text Alerts

Text Alerts
Stay connected to us wherever you are! Get breaking news updates along with other area information sent to you as a text message to your wireless device.

Email Newsletters

Email Newsletters
We'll deliver news & updates to your inbox. Plan your weekend and catch up on the news with our newsletters.