DETROIT - The ultimate decision facing Judge Steven Rhodes is this: Does Michigan's Constitution, which protects retiree pensions, supersede federal bankruptcy law?
That's what Attorney General Bill Schuette is going to argue.
"My job as attorney general is to aggressively advocate that position," the AG said.
Detroit's emergency manager and the high-powered restructuring specialists working on the city's Chapter 9 filing believe that federal law trumps Michigan's Constitution.
Would Detroit retirees be left with nothing? No, but there would be a reduction to pensions. How steep a reduction has yet to be determined.
Knowing all of this, Schuette will still argue Detroit's pensioners should be made whole. His chances of success are limited.
"Anybody who knows me knows that I'm an attorney general that supports and defends the Constitution," he said.
The governor, for his part, sees the AG's role in the bankruptcy limited to the Michigan Constitution question.
"There is still a request in front of the bankruptcy judge to appoint a creditor's committee that will include retirees, so they will be the party that will really be representing retirees, but I also appreciate the attorney general understanding there is a constitutional issue," said Gov. Rick Snyder.
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