Chapter 9 Decision Expected for Detroit

A decision is expected on Detroit’s Chapter 9 case any time in the next few days. It  is not surprising that the ruling is taking a while to come out, since the Chapter 9 proceedings for Detroit are among the most complex ever filed.

Chapter 9 Delay Explained

The delay is due to the U.S. Bankruptcy Judge Steven Rhodes deliberating over whether or not the city is eligible to file for Chapter 9 bankruptcy. If Judge Rhodes decides that Detroit is eligible, it will mark the largest municipal bankruptcy ever on record.

The judge has been deliberating following the hearing to determine eligibility for the city, in which each side delivered heated arguments for and against Detroit’s eligibility. At the heart of the debate is the issue of whether city officials attempted to negotiate in good faith with the city’s thousands of creditors to obtain a settlement before resorting to Chapter 9 municipal bankruptcy. Among the most outspoken opponents are the representatives from Detroit’s pensioners and city workers, who stand to possibly lose their pensions and other owed monies if the city is allowed to file.

Those in the know when it comes to Detroit’s case say that Judge Rhodes has a reputation as a very thorough judge, and he is likely taking his time poring over every aspect of the case before delivering his ruling. It is expected that the judge will deliver his verdict in the very near future, but no timeline has been set up yet.

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