Calif. Ch. 9 Cases Will Guide Detroit On Eligibility Issues
By Erin Coe
Law360, San Diego (July 22, 2013, 10:46 PM EDT) -- The California municipal bankruptcies of Stockton and San Bernardino will provide guideposts for Detroit as it navigates the eligibility process in its Chapter 9 case, but the Michigan city’s ability to establish that it’s eligible as a debtor is complicated by a state judge’s finding last week that its bankruptcy petition was unconstitutional, according to experts.
Facing at least $18 billion in debt, Detroit filed its Chapter 9 petition Thursday and seeks massive concessions from the city’s pensions and bondholders. Detroit’s population of 700,000 makes it...