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Reuters: Detroit Bankruptcy Challenged on Constitutional Grounds

August 20, 2013, 07:19 AM
Filed Under: Bankruptcy

Reuters reported that public labor unions in Detroit asked a U.S. court to toss the city's bid for protection from its creditors because it is constitutionally flawed on both the state and federal levels.

According to the Reuters report, a union that represents public-sector workers argued that Chapter 9 of the federal bankruptcy code violates the U.S. Constitution.

Additionally, Reuters reported that unions representing the city's firefighters and police alleged that state-appointed emergency manager Kevyn Orr had failed to negotiate in good faith, stating "there were no negotiations."

Michigan Attorney General Bill Schuette said in a filing that even if the bankruptcy case continues, the city cannot be allowed to ignore state constitutional protections for retirement benefits earned by its employees, according to the report.


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