Detroit's lawyers argue in support of bankruptcy

City unions, retirees say threat to pension violates Michigan's constitution

Published On: Dec 24 2013 11:24:55 AM EST   Updated On: Oct 15 2013 05:56:57 PM EDT
DETROIT -

Lawyers representing Detroit in its quest to enter the largest municipal bankruptcy in U.S. history say eliminating pension benefits for retirees isn't among their goals.

Jones Day law firm attorney Bruce Bennett also told federal Judge Steven Rhodes on Tuesday that he doesn't think the state has an obligation to guarantee municipal pensions.

Rhodes is holding hearings Tuesday and Wednesday ahead of next week's trial to determine whether Detroit is eligible for bankruptcy.

City unions and retirees point to the threat to pensions as among the reasons why bankruptcy should be denied. They say pensions are protected by Michigan's Constitution.

"Kevyn Orr has made it clear he plans on gutting the Detroit retirees' pensions in violation of the state constitution," said AFSCME union lawyer Michael Artz.

State-appointed emergency manager Kevyn Orr has said federal bankruptcy law supersedes state law.

"If the public can go to ballot booth and repeal a law than have the legislature to introduce a substantial similar law, right on its heels then there is no referendum in Michigan," said former Detroit candidate for mayor Krystal Crittendon.

Orr says Detroit has $18 billion or more debt, and that pensions are underfunded by $3.5 billion.

"We very strongly feel there is an issues of whether or not state officials should be allowed to hide behind the bankruptcy process and not be accountable to the citizens of Detroit," said AFSCME lawyer Sharon Levine.