Dozens Plead Their Objections to Illegal Detroit Bankruptcy

Abayomi Azikiwe, editor of the Pan-African News Wire, outside federal court September 19, 2013. The judge heard objections to the bankruptcy filing., a photo by Pan-African News Wire File Photos on Flickr.

September 19, 2013 at 10:31 pm

Retirees plead with judge to end Detroit bankruptcy proceedings

Robert Snell and Chad Livengood
The Detroit News

Protesters gather outside the bankruptcy court hearing Thursday.

Detroit— A parade of Detroit residents and retirees tried to derail the city’s bankruptcy case Thursday, arguing the filing was not made in good faith and would slash constitutionally protected pensions.

Dozens of speakers gave at times angry or tearful speeches during a rare opportunity to address U.S. Bankruptcy Judge Steven Rhodes and humanized what until Thursday had been clinical deliberations involving the biggest municipal bankruptcy case in U.S. history. The speakers were challenging the city’s eligibility for Chapter 9 bankruptcy relief while illustrating the impact of Detroit restructuring $18 billion in debt.

The speeches ranged from the poignant to the political to the oddball. A widow pleaded with Rhodes to preserve her late husband’s pension and Detroit councilwomen JoAnn Watson and Brenda Jones argued that the city is ineligible for Chapter 9 bankruptcy protection.

Whether those arguments will succeed in kicking Detroit out of bankruptcy court will be decided later. Rhodes is holding a trial next month to determine the eligibility issue.

The hearing showed “democracy at its finest,” Rhodes said after more than three hours of testimony.

In a separate matter, Rhodes handed the city’s creditors a small victory in ordering Emergency Manager Kevyn Orr to answer questions for a second time under oath about his discussions with Gov. Rick Snyder leading up to the decision to declare bankruptcy two months ago.

Rhodes said any legal advice Orr sought from the city’s and Snyder’s attorneys before the July 18 filing is protected by attorney-client privilege. But the judge said Orr would have to disclose any discussions he had with Snyder, such as “the political ramifications of the bankruptcy.”

Emotional day in court

At the earlier hearing, the residents argued the Chapter 9 bankruptcy filing was not authorized by elected city officials and claimed Detroit is not insolvent because it failed to determine the value of Belle Isle, Coleman A. Young International Airport or the Detroit Institute of Arts masterpieces prior to the filing.

The hearing opened with a slur, and a warning from the judge.

Creditor Hassan Aleem attacked Orr, claiming Snyder chose the Washington, D.C., bankruptcy attorney to lead the city only because he is black and was “never the sharpest knife in the drawer.”

Aleem’s comments prompted Rhodes to warn residents objecting to the city’s bankruptcy case against making personal attacks.

“I understand the depth of feelings people have about this,” Rhodes said. “At the same time, however, I have to ask you, seriously, to refrain from personal attacks on Mr. Orr or really anyone. This is not the time and place for it.”

The widow of a former Detroit police sergeant said the bankruptcy filing threatens her late husband’s $3,000-a-month pension.

Cynthia Blair said she does not have Social Security and any cuts to her pension would throw her “directly onto the welfare roll.”

Paulette Brown, a retired manager in the Detroit Water and Sewerage Department, said retirees are being treated badly in the city’s bankruptcy case. She invoked NFL quarterback Michael Vick while trying to illustrate her point.

“Michael Vick went to prison for cruelty to animals. Who is going to prison for proposed cruelty to employees?” Brown asked Rhodes.

'We are not bankrupt'

A tearful Detroit retiree, Sheilah Johnson, said she and her former workers are being treated like slaves. Johnson retired after working for the city for 28 years and faces a bleak future if her $3,000-a-month pension is cut in bankruptcy.

Johnson, who is black, tried to get the city’s bankruptcy case dismissed by arguing the city is not bankrupt.

“We are not bankrupt,” she said. “Anyone who believes that believes I am white.”

She started to cry while recounting a conversation with her grandson.

“He said, ‘Grandma, are they trying to make us slaves again?’ ” she said. “This is not a dictatorship. I am not a slave. I earned my pension.”

Later in the day, at a separate bankruptcy hearing, a committee representing retirees mounted a legal bid to delay the proceedings and get the issue of Detroit’s eligibility discharged to federal district court under an argument that Rhodes doesn’t have the jurisdiction to rule on the constitutionality of the filing.

The judge said he’d take the retiree committee’s request for a stay under advisement, but questioned whether it would unnecessarily delay the fast-moving proceedings.

Sam Riddle, the former political consultant who was convicted in a corruption case stemming from his time working for ex-Detroit Councilwoman Monica Conyers, said the city’s bankruptcy case revolves around questions of race and democracy.

Riddle said the bankruptcy has disenfranchised black residents.

“Do dollars trump democracy?” Riddle asked. “More black Americans in America’s blackest city have seen their votes rendered meaningless.”

rsnell@detroitnews.com
(313) 222-2028

From The Detroit News: http://www.detroitnews.com/article/20130919/METRO01/309190119#ixzz2fPBXIHLy