USA Today called Judge Steven Rhodes rulings yesterday a "clean sweep" for the lawyers who filed the bankruptcy petition. His ruling not to wait for state court decisions challenging the bankruptcy moves his court's deliberations forward despite efforts by unions and others to have decisions such as whether the state's constitution prevents pension reductions decided in state court first. The ruling is jurisdictional, leaving substantive decisions, including whether Detroit is even eligible for bankruptcy, to another day. Gongwer News (sub. req.) listed the issues Judge Rhodes specifically referenced as still outstanding:
- Whether the Michigan Constitution prohibited Mr. Orr’s appointment as emergency manager or Mr. Snyder authorizing the bankruptcy filing without noting pension rights for Detroit retirees;
- Whether state court orders entered pre- or post-bankruptcy should have some type of determinative effect on how the bankruptcy court will consider those issues;
- Whether any orders by a state court after the bankruptcy case was filed violated the automatic stay imposed in bankruptcy cases on other litigation involving the debtor, in this case Detroit; and
- Whether Detroit can propose a feasible or confirmable reorganization plan given the protections afforded to public pensions in the Michigan Constitution or any other consideration.
The governor, for one, was pleased with Rhodes' ruling:
One of the benefits of the bankruptcy process is you can hopefully consolidate all of these lawsuits into one place in a much more organized fashion.
The New York Times, Forbes, Crains, Wall Street Journal, Free Press, Detroit News, and Business Week all had stories on the ruling.
The next court date is Aug. 2.
