DETROIT (AP) — Banks, bond insurers, employee pension systems and others standing to lose big if a federal judge declares Detroit insolvent are expected to legally file their objections to the largest municipal bankruptcy in U.S. history.
Monday is the deadline for creditors to file eligibility objections to Detroit's bankruptcy petition — marking the beginning of legal challenges for those hoping to recoup all or most of what Detroit owes them.
The deadline is just one of several steps that could lead to federal Judge Steven Rhodes allowing Detroit into bankruptcy protection while it restructures. Conversely, it also could spell disaster for the struggling city if its petition is denied, allowing creditors to sue Detroit if it defaults on payments, said bankruptcy expert Doug Bernstein.
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