The U.S. Sixth Circuit Court of Appeals will allow appeals to Detroit’s bankruptcy eligibility ruling, The Detroit Free Press reported.
Detroit’s largest union – AFSCME Council 25 – and the city’s two pension funds – Detroit Police and Fire Retirement System and the General Retirement System – are among the creditors who filed an appeal to Judge Steven Rhodes’ December ruling that Detroit is eligible for bankruptcy.
According to the Freep’s Nathan Bomey and Matt Helms, Detroit’s bankruptcy case would continue as the appeal case works through the courts.
The central argument for the union and pension funds is that the city did not negotiate “in good faith” prior to filing for bankruptcy, meaning the city and state "rushed" to bankruptcy court.
Rhodes, in his ruling to approve Detroit's bankruptcy, determined that good faith negotiations were not possible under the circumstances.
The police and fire retirement pension funds are also arguing that the state’s emergency manager law is unconstitutional.
Confused by the good faith argument? Check out this interview with University of Michigan law professor John Pottow for an explanation of good faith.