DETROIT (AP) — Objectors to a Detroit bankruptcy are confusing careful and deliberate planning by state officials with pursuing bankruptcy at all costs, attorneys representing Detroit's state-appointed manager argued Friday.
They "want to punish the governor and treasurer for contingency planning, for doing their jobs," said lawyer Matthew Schneider, the state's chief legal counsel. "This was never about predetermining a Chapter 9 filing. This was only about careful consideration."
Attorneys representing Detroit's state-appointed manager were making their final case on Friday to a federal judge who will determine if the city can fix its finances in bankruptcy. Final arguments are continuing throughout the day from the city, retiree groups, unions and pension funds.
Recommended For You
The city in July became the largest municipality in the U.S to file for Chapter 9 protection, but Judge Steven Rhodes gets the final say on whether Detroit is eligible for a restructuring overseen by the court. Critics claim emergency manager Kevyn Orr wanted bankruptcy for months and didn't want to try good-faith negotiations before filing.
But Schneider told Rhodes that the bankruptcy filing was always a "last resort" and contingency planning doesn't "mean you want the storm to come."
Orr, a bankruptcy expert who was appointed emergency manager last March by Michigan Gov. Rick Snyder, has said Detroit has at least $18 billion in long-term debt, including $3.5 billion in pension shortfalls.
If Detroit is found eligible to stay in bankruptcy, the case would turn to how to solve the debt. The city has said it could propose a plan by the end of the year. Meanwhile, a team of mediators has been meeting with all sides in the hope of reaching an out-of-court compromise.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
