Mich. Judge Will Keep Obama Informed, Says Detroit Bankruptcy ‘Not Honoring’ President

by Sterling Beard

Ingham County circuit court judge Rosemarie Aquilina, who ruled today that Michigan governor Rick Snyder (R) must direct Detroit’s emergency manager, Kevyn Orr, to withdraw the Chapter 9 bankruptcy petition he filed yesterday, also wrote that she would transmit a copy of her order to President Obama.

“I know he’s watching this,” the Detroit News quotes Aquilina saying, noting that she predicted that Obama would eventually step in and take action.

Aquilina ruled that the 2012 law that allowed Governor Rick Snyder (R) to approve the city’s bankruptcy violates the Michigan Constitution. Specifically, Article IX Section 24, which holds that pension plans and retirement systems “shall not be diminished or impaired.”

The judge wrote that Snyder was prohibited by the Michigan Constitution from using the Local Financial Stability and Choice Act to authorize Orr to proceed “under Chapter 9 in a manner which threatens to diminish or impair accrued pension benefits.”

The declatory judgment ordered that Snyder direct Orr to withdraw the Chapter 9 petition and not authorize “any further Chapter 9 filing which threatens to diminish or impair accrued pension benefits.”

Aquilina also scolded assistant attorney general Brian Devlin over the manner in which the bankruptcy petition was filed. The state filed it yesterday in an apparent attempt to preempt a restraining order from pension boards.

The Detroit Free Press quotes the judge as saying that there was a “rush to bankruptcy court that didn’t have to occur and shouldn’t have occurred.”

According to the Detroit News, Aquilina also described the filing as “cheating,” and declared that “it’s also not honoring the president [of the United States], who took [Detroit’s auto companies] out of bankruptcy.”

Michigan Attorney General Schuette filed for appeal an hour after the ruling came down. In addition, he has asked the Appeals Court to hold current and future proceedings and is planning to seek emergency consideration.  

Sara Wurfel, press secretary for governor Rick Snyder, told National Review in an e-mail that the governor’s office had complete confidence in the constitutionality of Snyder’s and Orr’s actions.

The White House said Friday that there are no plans to bail out Detroit.