Reuter’s reported that a federal court was asked to suspend seven pending appeals over Detroit’s eligibility for bankruptcy until the bankruptcy confirmation plan is confirmed to adjust $18 billion of debt.
Attorneys for the city, Michigan, Detroit pension funds, unions and others that filed five of the appeals said that moving forward with the cases now would “significantly undermine” settlements and mediation and could delay the city’s exit from the biggest municipal bankruptcy in U.S. history. But – they also declined to dismiss their cases at this point. “Holding the appeals in abeyance also ensures that this court will not unnecessarily decide important state and federal constitutional issues,” the attorneys said in a letter to the U.S. Court of Appeals for the Sixth Circuit.
The appellants maintained that the federal appeals court would retain jurisdiction after the plan confirmation process to review a December ruling by Bankruptcy JudgeSteven Rhodes that found Detroit was broke and eligible for chapter 9 municipal bankruptcy.