Objections flood in as deadline passes to oppose Detroit bankruptcy
Tuesday saw a flood of court filings from Detroit's creditors.
Midnight was the deadline for creditors to file objections to Detroit's request for Chapter 9 municipal bankruptcy protection.
About 100 unions, pensioners, and individuals filed objections with the court.
Their arguments are familiar. Some maintain that the city is not, in fact, insolvent. Others insist that Detroit's emergency manager, Kevyn Orr, failed to negotiate with creditors in good faith before filing for bankruptcy protection.
Sharon Levine, an attorney for the American Federation of State, County, and Municipal Employees, called negotiations with Orr prior to the bankruptcy filing a “charade.” She pointed to emails the union obtained that show Orr’s colleagues considered bankruptcy the “ideal scenario” as far back as January, according to The Detroit News.
“In fact, all along the clear goal was for the City to end up in chapter 9,” Levine wrote.
Orr's spokesman Bill Nowling insists he tried to bargain with creditors, but ended getting hit with lawsuits.
Others, including union and retiree representatives, maintain the filing violates Michigan’s constitutional protections for public pensions.
Individual Detroiters and business owners can file objections, too. Some gathered to do that at the last minute Monday, noting some got court notices in the mail about their right to object just days ago.
Former Detroit corporation counsel Krystal Crittendon says that violates the law. “The due process clause of the constitution requires that anybody who is interested in this bankruptcy be provided a meaningful notice and opportunity to be heard,” she said.
Judge Steven Rhodes will review all those claims. He's scheduled an October 23 hearing to determine the city's eligibility for bankruptcy protection.
One party that did not file an objection is the Detroit Institute of Arts. Museum officials say they actually support the bankruptcy filing. But in a statement they reiterated their argument that its collection is a public trust that cannot be liquidated to pay creditors.