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Posted by: Maricopa Lawyers on Jul 25, 2013

News broke earlier this month regarding the Detroit bankruptcy proceedings. Detroit’s attempt of securing municipal bankruptcy protection is already being billed as the largest filing in US history.


Detroit lawyers are now asking a judge to dismiss several lawsuits attempting to thwart the move for bankruptcy protection, suggesting federal court is the only proper venue to host the issue. Yet many city employees are determined to block the measure as they fear their retirement and pension plans are on the line.

Judge Steven Rhodes began proceedings today by indicating the hearing would address two central issues: a motion to stay all relegated litigation and an additional motion to extend that stay to certain lawsuits against the governor, state treasurer and others. Attorneys representing city workers are expected to make their beginning arguments soon.

While Detroit has captured the national spotlight, the local scene is growing increasingly tense. City firefighters have been staging recurring protests outside of the court house.

Detroit has long been considered the staple of the US automotive industry but has struggled for several decades. Local companies have subsequently moved or closed their doors as crime rates have steadily increased in the same period of time.

City revenue couldn’t manage to satisfy city spending, a situation that brought on years of budget deficits and dependence on borrowing. Detroit has amassed over $18 billion of debt and unfunded liabilities during this tumultuous period. Part of this figure includes a $3.5 billion pension liability.

Rhodes earlier agreed to an expedited hearing per Orr’s request that will seek to extend Chapter 9’s automatic stay of litigation regarding lawsuits filed against Governor Rick Snyder, Michigan Treasurer Andy Dillon, and Orr on behalf of Detroit workers, retirees and pension funds.