Tuesday, January 28, 2014

Michigan AG Asks for Speedy Appeal of Detroit Pension Cuts

The Bond Buyer reports:
Michigan Attorney General Bill Schuette Monday asked a federal appeals court for a speedy decision on whether Detroit can cut its pensions, calling it a question of national importance.

The controversial question is at the center of the city's historic bankruptcy case. Judge Steven Rhodes, who is overseeing the case, ruled in December that pensions have the same status as contracts and can be cut in Chapter 9, despite state constitutional protections.

Schuette plays what some say is an awkward role in the case, serving both as counsel to Gov. Rick Snyder, who wants to cut pensions, and a role as the state's elected "people's attorney." In that role, he has argued since last summer that Detroit's effort to cut pensions is illegal because of the state's constitutional clause banning any impairment or reduction in the claims.

Schuette filed the court brief, which is a response in support of the creditors who are appealing the bankruptcy court's decision on pensions, in the US Court of Appeals for the Sixth Circuit.

"Attorney General Schuette is doing what he said he would do, taking advantage of every opportunity to defend the Constitution and pensions of retired fireman and police officers," said his spokeswoman, Joy Yearout.

The filing argues that the questions of whether Detroit is bound to comply with the state constitution or not calls for immediate review.
History in the making.