February 18, 2014 at 1:00 am

Town home group denied extension as deadline for Detroit bankruptcy claims looms

With the deadline for claims against the city of Detroit looming Friday in the cityís historic municipal bankruptcy case, a group of town-home developments has requested and been denied an expedited hearing on the groupís request for an extension of the Friday deadline for filing a proof of claim against the city.

The parties in the Town Houses Cooperative Association asked U.S. Bankruptcy Judge Steven Rhodes for more time to get their complaint classified as a class action. An earlier order allowed the town house group to continue its case as it sought class-action status but that hearing, in another court, isnít scheduled until March, after Fridayís claims deadline.

Potential creditors affected by the cityís Chapter 9 municipal bankruptcy filing must file a formal proof of claim by Friday, unless their claims are included in the list of claims with the bankruptcy filing. Others that donít have to file claims include city workers and retirees and their beneficiaries, taxpayers, general obligation bondholders and certain other bondholders.

Anyone else, such as an accident victim or city vendor, would be barred from pursuing a claim against the city if it isnít filed by Friday.

The town house group consists of the Lasalle Town Houses Cooperative Association, Nicolet Town Houses Cooperative Association, Lafayette Town Houses Inc., Joliet Town Houses Cooperative Association and St. James Cooperative.

The complaint is the city Water and Sewerage Department has been and continues to illegally overcharge those developments for water and sewer services. According to court filings, the town house group holds that its rate classification is unconstitutional and violates the equal protection clause.