Former mayor of Detroit David Bing said that he doesn’t believe the challenge to Detroit’s bankruptcy filing, made on Friday by state workers, will stand up. The city workers asserted that the filing violated the Michigan state constitution and that existing pension and compensation agreements can’t be adjusted, but Bing explained, “I think the federal constitution will trump the state constitution here.”
Detroit filed for bankruptcy on Thursday under Chapter 9 of the federal bankruptcy code, which pertains to municipalities, but the precedent for large municipal bankruptcies and adjustments of their obligations to employees is thin, and Detroit’s settlement will likely break new ground.