At the request of Detroit’s creditors, the Sixth Circuit Court of Appeals on Friday froze pending appeals related to the city’s eligibility for bankruptcy and ability to reduce pensions.
Five major Detroit creditor groups representing pensioners joined the city and State of Michigan on Thursday in asking the federal appeals court delay action on their appeals until after a trial next month on the city’s bankruptcy exit plan.
Detroit’s two pension funds, retiree groups and several labor unions have struck deals with the city to support its plan to shed $7 billion in debt in exchange for modest cuts to pensioners through the so-called “grand bargain.”
The three-judge panel entered a single sentence decision Friday in the court docket: “Based on the submissions of the parties, these cases are stayed.”
U.S. Bankruptcy Judge Steven Rhodes has a scheduled a trial over the feasibility of Detroit’s debt-cutting plan to being Aug. 21 and last as long as 23 days over five weeks if necessary.
On Tuesday, the appellate judges signaled an interest in ruling on the appeals or dismissing them before the start of the trial.