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View Diary: Challenges to Detroit bankruptcy will be decided in bankruptcy court, judge rules (72 comments)

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  •  And, the bankruptcy court must defer (4+ / 0-)
    Recommended by:
    bobdevo, loretta, Aquarius40, shaktidurga

    to the precedents of Michigan courts in the interpretation of the state Constitutional provision.  

    With the Decision Points Theater, the George W. Bush Presidential Library becomes the very first Presidential Library to feature a Fiction Section.

    by Its the Supreme Court Stupid on Wed Jul 24, 2013 at 03:04:31 PM PDT

    [ Parent ]

    •  Doesn't Federal Law... (1+ / 0-)
      Recommended by:
      Victor Ward

      ...supersede a state Constitution though?

      Surely a state can't just modify their Constitution to say that

      All bankruptcy cases involving debtors or creditors within the state shall be decided by an appointee of the governor.
      or
      In bankruptcy, all assets will first be distributed equally to all residents who have resided for at least 180 days within the jurisdiction before creditors will be given consideration of their rights to the remaining $0
      to eviscerate the power Congress has to establish uniform laws on the subject of bankruptcies?

      Remember that every penny that is protected for pensions is a penny that is NOT available to a bondholder in another state (i.e., Interstate Commerce!) who purchased a bond guaranteed by the full faith and credit of the municipality.

      •  Dude... (0+ / 0-)

        Michigan's Supreme Court is 5-2 GOP.

        They are gonna take the least pro-union stance they can. They'll point out that if the legislature wanted to protect pensions from bankruptcy it could have said so flat-out, rather then allowing this mess to happen.

        More to the point there ISN'T ENOUGH MONEY to pay the pensions. Orr asked for all creditors to give up 90%. That means any dollar of pensions protected has to come from the 10% that bondholders were supposed to get. There are three options:

        1) All Police in Detroit get fired, and RoboCop actually happens, except there's no robot cops to save the day.

        2) Pensionees lose money.

        3) Federal bail-out.

        3) is not happening. Period. If 1) happens the next damn day the Legislature will propose a Constitutional Amendment abolishing all public pensions, and everyone in the entire damn state (including most union-members) will vote for it.

        The unions can string this out, but they can't win.

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