Appeals court to hear Detroit bankruptcy eligibility appeal this month

Appeals court to hear Detroit bankruptcy eligibility appeal this month

A federal appeals court plans to hear arguments later this month on the eligibility of Detroit’s bankruptcy filing, according to court documents. The hearing in front of the Sixth Circuit Court of Appeals in Cincinnati will be held just two weeks before the confirmation hearing on the Plan of Adjustment is scheduled to begin in bankruptcy court in Detroit.

Here’s the story:

After Bankruptcy Judge Steven Rhodes ruled last year that Detroit’s bankruptcy case could go forward, several groups representing employees and retirees appealed his decision to the Sixth Circuit. In February, that court ruled the appeal could proceed but refused to expedite it as the attorneys had asked. Now the court says it will hold  arguments on the issue July 30.

Each side will have one hour to argue before a three-judge panel, the court wrote.

The city has asked the arguments on the appeal be postponed if pensioners vote in favor of the city’s Plan of Adjustment. Votes are due July 11, and the city plans to report votes to the bankruptcy court by Monday, July 21, city spokesman Bill Nowling said earlier this week. City lawyers repeated that plan in their request for the postponement of eligibility arguments.

According to terms reached in negotiations and in the “Grand Bargain,” if the two classes of pensioners — police/fire and non-uniform — vote in favor of the plan, they agree not to pursue pending litigation, such as the appeal of the bankruptcy eligibility. Several employee groups who are parties to the appeal have reached agreements with the city as part of the bankruptcy negotiation and have agreed to support the Plan of Adjustment. These include the Police and Fire Retirement System; the General Retirement System; the Official Committee of Retirees; American Federation of State, County and Municipal Employees Council 25; Retired Detroit Police and Fire Fighters Association, the Detroit Retired City Employees Association, the Detroit Police Command Officers Association and the International Union, UAW.

But the Retired Police Member Association, the Detroit Fire Fighters Association and the Detroit Police Officers Association — have not reached agreements with the city in the bankruptcy and are also parties to the eligibility appeal.

 

-By WDET’s Sandra Svoboda

@WDETSandra and nextchapter@wdet.org