Detroit tried to cut pension benefits by declaring that it was bankrupt, but was blocked from the process by Judge Rosemarie Aquilina. The Judge notified Michigan Governor Rick Snyder and Emergency Manager Kevyn Orr that further actions against the pension benefits be suspended.
“Snyder must order Orr to withdraw the Chapter 9 Bankruptcy filing and make sure he does not authorize any more Chapter 9 filings which threaten to diminish or impair accrued pension benefits,” said Judge Aquilina. The order was reached after the state’s pension board filed suit against the bankruptcy filing.
Detroit was effectively blocked from declaring bankrupt and top officials immediately appealed to counter the order by Judge Aquilina. Critics have commented that Detroit’s problem was tied to its auto troubles. The major companies are not pulling their weight in the common market which has greatly affected the city’s economy.
Unions were relieved that their efforts to stave off the actions of Detroit officials were successful. Judge Aquilina said in a statement, “I have some very serious concerns because there was this rush to bankruptcy court that didn’t have to occur and shouldn’t have occurred.” Detroit for now is blocked from declaring bankrupt procedures and must find another strategy pending the appeal process.
By Thomas Barr