Judge Rules Detroit Is Eligible For Chapter 9 Bankruptcy

Tuesday, December 3, 2013

A federal judge has ruled that the city of Detroit is eligible for Chapter 9 bankruptcy.

During a 90 minute address from the bench, Judge Steven Rhodes built the case for his ruling – discussing issues such as the city’s insolvency and the constitutionality of Chapter 9 bankruptcy protection.

Rhodes ruled that the city did not bargain in good faith – but added that with 100,000 creditors, that it was impracticable to do so. He said the city did file its bankruptcy petition in good faith.

Rhodes also ruled that pensions are subject to be cut under federal bankruptcy law.