The Ottumwa Courier

October 23, 2013

Trial to examine if Detroit eligible in bankruptcy

ED WHITE
Associated Press

---- — DETROIT (AP) — The city of Detroit is going to court in an unusual trial that will determine if it really qualifies to scrub its finances in the largest public bankruptcy in U.S. history.

Detroit filed for Chapter 9 protection in July, flattened by at least $18 billion in debt. But nothing can happen until a judge finds the city is eligible to be in bankruptcy court.

Unions and pension funds claim Detroit flunks the test because it failed to hold "good-faith" negotiations with them earlier this year, a key point in bankruptcy law. The city says it's met its burden.

The trial starting Wednesday is expected to last several days with testimony from emergency manager Kevyn Orr and possibly Gov. Rick Snyder, who authorized the bankruptcy filing in July.