It may be temporary, but there is some good news coming out of Detroit today.
A local judge has temporarily blocked emergency manager Kevyn Orr’s request for bankruptcy because it is unconstitutional, and there are two very good reasons why.
LANSING — An Ingham County judge says Thursday’s historic Detroit bankruptcy filing violates the Michigan Constitution and state law and must be withdrawn. [...]
In a spate of orders today arising from three separate lawsuits, Aquilina said Gov. Rick Snyder and Detroit emergency manager Kevyn Orr must take no further actions that threaten to diminish the pension benefits of City of Detroit retirees.
The idea that public pension holders may be irrevocably screwed under Kevyn Orr’s bankruptcy plan is well founded as the Wall Street Journal reported yesterday that municipal retirees may receive only 10 percent of what they’re owed under the plan.
But that’s not the only reason Circuit Judge Rosemarie Aquilina has temporarily blocked the plan. Aquilina also blocked it because emergency manager Kevyn Orr deceptively filed the request in a separate court just minutes before the hearing wherein she intended to block it.
“Plaintiffs shouldn’t have been blindsided,” and “this process shouldn’t have been ignored.”
Lawyers representing pensioners and two city pension funds got an emergency hearing with Aquilina Thursday at which she said she planned to issue an order to block the bankruptcy filing. But lawyers and the judge learned Orr filed the Detroit bankruptcy petition in Detroit five minutes before the hearing began.
Attorney General Bill Schuette announced today that he will appeal Aquilina’s ruling.