Judge stops lawsuits against Detroit bankruptcy

DETROIT (AP) — A federal judge agreed with Detroit on Wednesday and stopped any lawsuits challenging the city’s bankruptcy, declaring his courtroom the exclusive venue for legal action in the largest filing by a local government in U.S. history.

The decision by U.S. Bankruptcy Judge Steven Rhodes was a major victory for Detroit, especially after an Ingham County judge last week said Gov. Rick Snyder ignored the Michigan Constitution and acted illegally in approving the Chapter 9 filing. That ruling and others had threatened to derail the case.

Retirees had sued, claiming the bankruptcy threatened their pensions that are protected by the constitution.

Rhodes said there’s nothing in federal law or the U.S. Constitution that gives a state court a shared role in a bankruptcy.

Questions about Detroit’s eligibility to overhaul itself through bankruptcy “are within this court’s exclusive jurisdiction,” he said.

Michael Nicholson, general counsel for the United Auto Workers, said he plans to review the judge’s order with his colleagues and decide whether to appeal, but he says the rulings raise “serious issues about the relationship of state and federal government.”

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