October Trial Possible In Detroit Bankruptcy Case
DETROIT (WWJ/AP) - Can Detroit legally file for bankruptcy? A judge will hear arguments on Friday to determine just that.
Bankruptcy Judge Steven Rhodes wants opinions from the city and creditors about starting a trial on Oct. 23. The judge also is proposing a March 1 deadline for Detroit to come up with a financial plan.
WWJ Legal Analyst Charlie Langton says this shows that Rhodes is trying to expedite the city's case.
"It's a very important hearing, It's important because, if Detroit is not eligible for bankruptcy ... I don't know what Detroit's gonna do — but it can't go into bankruptcy court," said Langton.
During this hearing, creditors have a right to argue that the city doesn't qualify.
"Detroit is going to have to prove that it is bankrupt," said Langton. "But some of these creditors out there may say, 'Hey, wait a minute: Detroit does have money; Detroit has Belle Isle; Detroit has the art; Detroit has a tax base.'"
Detroit can be eligible if Emergency Manager Kevyn Orr successfully shows he negotiated in good faith with creditors but could not reach a deal.
Some unions, including AFSCME, say they plan to make an argument.
Gov. Rick Snyder approved Detroit's Chapter 9 bankruptcy filing on July 18, saying it was the only viable option for the city suffocating under an estimated $18 billion on long-term debt.
Get complete coverage of Detroit's bankruptcy HERE.
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