Detroit fights to save its Chapter 9 bankruptcy filing
Drafts 135-page court document to defend its case
According to The Bond Buyer, Detroit is heading into battle to defend its filing for Chapter 9 bankruptcy protection, beginning with a 135-page court paper that tackles creditors' objections one-by-one.
The filing comes ahead of the first hearing in a two-stage trial beginning later this month to determine if the city is eligible to enter into Chapter 9 bankruptcy protection. If approved by the federal courts, the case would become the largest municipal bankruptcy in U.S. history.
Michigan's filing, which came from Attorney General Bill Schuette's office, argues as Detroit does that objections on the grounds that creditors' claims -- mostly pensions -- will be impaired are invalid, because the city has not yet formally proposed impairing pensions or other debts. Authorizing Chapter 9 itself does not impair pensions, the city argued.