Detroit bankruptsy denied because it "dishonors Obama"

[Magneto]

You can't make this stuff up!

Judge Voids Detroit Bankruptcy, Says it ?Dishonors Obama? | FrontPage Magazine

 

[Polished515]

<~~~~ closest I could find to a smiley shooting itself....

 

[Arm America]

Well if I lived in Detroit, I'd be feeling all warm and fuzzy now!

Judge just Bangs the gavel and all their problems go away.

Reminds me of Alice in Wonderland but no glass slippers.

 

[GodFearinGunTotin]

“It’s cheating, sir, and it’s cheating good people who work,” the judge told assistant Attorney General Brian Devlin. “It’s also not honoring the (United States) president, who took (Detroit’s auto companies) out of bankruptcy.”


Aquilina said she would make sure President Obama got a copy of her order.


“I know he’s watching this,” she said, predicting the president ultimately will have to take action to make sure existing pension commitments are honored.

This actually made me laugh out loud. Though I'm not familiar with this site, I did double check to make sure it wasn't the Onion.

 

[cobber]

Erm, no, Obama dishonors Obama.

 

[IndyDave1776]

While lacking the quotes, Reuters confirms that this judge did in fact issue the order in question.

Michigan judge orders withdrawal of Detroit bankruptcy petition | Reuters

 

[SEIndSAM]

Well now wait. I thought Bankruptcy was filed in Federal Court. What power would a State Judge have to stop something filed in Federal Court????

 

[IndyDave1776]

Well now wait. I thought Bankruptcy was filed in Federal Court. What power would a State Judge have to stop something filed in Federal Court????

When the rule of law is only a quaint notion housed in the recollection of the aged (as is the case of Detroit and several other SSRs), the sky is the limit on the abuse and usurpation of power.

 

[cobber]

Well now wait. I thought Bankruptcy was filed in Federal Court. What power would a State Judge have to stop something filed in Federal Court????

Reading further, the plaintiffs are claiming that the effect of bankruptcy would decrease pensions, which they claims violates the state constitution.

This will probably go up the courts of appeal fairly quickly.

So open your wallet and bend over.

 

[Bill B]

Well now wait. I thought Bankruptcy was filed in Federal Court. What power would a State Judge have to stop something filed in Federal Court????

It wasn't even state-level, it was a county judge..

 

[Mark 1911]

Erm, no, Obama dishonors Obama.

 

[CathyInBlue]

It wasn't even state-level, it was a county judge..

Citing an unconstitutional Michigan state law. Detroit city officials cannot indebt the entire state of Michigan to pay for their sweet-heart city employee pension plans. That is what the law this judge is hanging her hat on to claim that the city filing for federal bankruptcy is "unconstitutional", when what she means is "illegal" based on an unconstitutional law.

 

[Kirk Freeman]

Drowning my government in my bathtub?

What a wonderful thought!

 

[HoughMade]

She is grandstanding and has no authority to do this. In fact, it is illegal for her to do so. She needs to fire up the Lexis and look up "Automatic Stay."

 

[CarmelHP]

Well now wait. I thought Bankruptcy was filed in Federal Court. What power would a State Judge have to stop something filed in Federal Court????

It doesn't have to be, though this was a federal filing in MIEB. It seems that the state dispute was over the authority to file, not the filing itself.

 

[UncleMike]

She is grandstanding and has no authority to do this. In fact, it is illegal for her to do so. She needs to fire up the Lexis and look up "Automatic Stay."

She looking to get a Federal Judge appointment.
What better way than to butter up the arrogant, self centered, egotistical, spoiled brat in the White House?

 

[Irukanji]

Well if I lived in Detroit, I'd be feeling all warm and fuzzy now!

Judge just Bangs the gavel and all their problems go away.

Reminds me of Alice in Wonderland but no glass slippers.

Actually it means they have to pay all of the bond an debt holders ... the judge actually screwed the citizens out of a future without massive taxes and hardship. Bankruptcy usually allows them to reorganize and restructure their obligations in a way that is friendlier to the borrower. Trust me, I have had a zillion tenants BK on me and it is a pain in my butt! LOL

 

[BehindBlueI's]

I listened to an interview with the city's lead on the bankruptcy last night, and (as usual) there's a lot more to it. The judge issued the stay because pensioners asked for a stay based on the state constitution, which reads as follows:

§ 24 Public pension plans and retirement systems, obligation.
Sec. 24. The accrued financial benefits of each pension plan and retirement system of the state and its
political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired
thereby.

I'm sure the city is going to rely on the Fed's ability to poop on a state constitution, but by state law they apparently can't reduce promised pension benefits.

Detroit has a lot of issues, beginning with a huge geographical footprint and insufficient population to fill it. 138 square miles to maintain and administer (San Francisco is about 50 square miles, St. Louis is about 60), and vast stretches are depopulated since the population is about 40% of what it was as its peak. Anyone who's ran a business or taken an accounting class knows about fixed costs, which don't change regardless of how many products you make (or citizens you serve). Detroit is saddled with huge fixed costs because of how spread out it is, but no longer has the population to adequately fund those fixed costs. That's a huge challenge to overcome.

 

[Bill B]

I would read that to mean the political subdivisions, nor the state, can "diminish" the pensions. But the city isn't diminishing the pensions, they are asking the federal court for relief under bankruptcy laws.
So if the federal court grants relief without diminishing the pensions, there is no foul.

 

[CarmelHP]

Bankruptcies discharge "contractual obligations" all the time. It's what they do most and do best.