The December 3 ruling that the city of Detroit is eligible to file for chapter 9 bankruptcy is now being allowed an appeal by the same judge. That judge, Steven Rhodes, has decided it best for the bankruptcy process to continue with a hearing at the U.S. 6th Circuit Court of Appeals.
Hurry Along Now
The biggest question now is how soon the hearing will be held. Rhodes hopes to make a decision in the coming days on whether to ask the appeals court to expedite the case in a speedy fashion. In fact, it appears everyone is anxious to move the bankruptcy process along as quickly as possible.
Lisa Fenning, the attorney representing the city of Detroit’s pension funds, has agreed that an expedited appeals process would be best. “We’re not trying to slow down the confirmation process. We think they need to go in tandem,” Fenning said. Fenning is a former bankruptcy judge herself.
Case of Massive Proportions
Earlier this month Judge Rhodes decided that the city of Detroit should be allowed to file for Chapter 9 bankruptcy; citing an $18.5 billion debt it could not realistically pay. Many in Detroit were not happy with the decision because of the $3.5 billion pension liabilities included in this number. A discharging of debt in this case will affect thousands of pension plans across the city.
Many are worried that a decision in this case will then be translated over to other US cities in the future. The fear is that cities will begin to feel entitled to an ability to file for Chapter 9 bankruptcy.
This bankruptcy process has been a long one, but some of the most important decisions are yet to be made. Judge Steven Rhodes’ decision on whether to expedite the appeals process is expected soon.