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Judge allows appeal in Detroit bankruptcy case

December 16, 2013

DETROIT (AP) — A judge in the Detroit bankruptcy case is allowing unions and pension funds to immediately appeal a critical decision to a higher court.

But Judge Steven Rhodes said Monday that he still needs a day or two to decide whether he’ll recommend that the federal appeals court fast track the case.

At issue is Rhodes’ recent decision to allow Detroit to stay in bankruptcy and restructure $18 billion in debt. The judge said the city is eligible to fix itself under Chapter 9, a ruling that also puts pensions at risk. Detroit emergency manager Kevyn Orr says pensions are underfunded by $3.5 billion.

A key matter in the appeal will be Rhodes’ decision that pensions can be cut. Meanwhile, the city and its creditors continue to negotiate.

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