By Joseph Lichterman
DETROIT Dec 20 The judge in Detroit's
bankruptcy case on Friday certified a direct appeal of his
recent decision declaring the city eligible for bankruptcy
protection, but recommended that a federal appellate court
reject it because the case would best be dealt with in
Judge Steven Rhodes, of U.S. Bankruptcy Court, in a written
decision said he is required to certify the appeal directly to
the U.S. 6th Circuit, a move that bypasses an intermediary step
of an appeal to U.S. District Court.
Still, he recommended that the higher court reject the
appeal and allow his court to embark on the process of resolving
the city's financial insolvency without the interruptions a
simultaneous appeal would impose.
On Monday, Rhodes said from the bench that he would allow
for the appeal to bypass the district court, but he delayed a
ruling on whether he would ask the higher court to expedite the
In his written ruling, Rhodes said he recommended that the
appeals court not take up the appeal because it would be best to
let the bankruptcy court decide whether to approve the city's
plan to adjust its debt quickly and completely without the added
burden of an appeals process.
"It is time now to begin that discussion, unfettered by
piecemeal appellate litigation," Rhodes wrote.
Rhodes wrote he is still maintaining a March 1 deadline for
Detroit to submit its plan of adjustment. Detroit's emergency
manager, Kevyn Orr, has said that the city plans to submit its
plan in early January.
The judge also wrote that if the court decided to take up
the appeal, he would not make a recommendation of whether it
should handle the matter in an expedited fashion. Instead,
Rhodes wrote that the appeals court should consult with U.S.
District Judge Gerald Rosen, the chief mediator in the case, to
ensure that an expedited appeals process does not interfere with
"The Court remains convinced that the interests of the City,
its residents and its creditors are better served by adjusting
the pace of the legal process, including the appeals, to meet
the needs of the mediation process," Rhodes wrote.
Attorney Sharon Levine, representing the American Federation
of State, County and Municipal Employees, said in an interview
that the union, which asked for a direct appeal, urges the
appeals court to take up the case expeditiously.
"The appeals should be decided quickly and in favor of
protecting the pensions and promoting good faith negotiations,"
Unions, as well as retirees and pension funds, have opposed
the bankruptcy, saying that plans to cut pensions for city
workers is a violation of the Michigan constitution.
Earlier this month, Rhodes declared that Detroit was
eligible for bankruptcy protection due to its insolvency and
because there were too many creditors for the city to negotiate
with. He also ruled that the city could cut pension benefits to
reduce its $18.5 billion in debt, however he said he will "not
lightly or casually exercise the power under federal bankruptcy
law to impair pensions."