Queens Bankruptcy Attorney Bruce Feinstein Updates Clients on Detroit's Landmark Municipal Bankruptcy
Queens, NY (PRWEB) July 29, 2013 -- Queens bankruptcy attorney Bruce Feinstein, Esq. and his colleagues have been keeping a close eye on the ongoing bankruptcy saga unfolding in Detroit. Mr Feinstein previously wrote about the city appointing a bankruptcy lawyer on his blog site, and recent events have had clients asking about how a city’s bankruptcy filing can affect its residents.
Mr. Feinstein has practiced as a bankruptcy attorney in Queens for over 15 years, working with people and businesses to help them get out of debt and restart their financial lives. So when it comes to municipal bankruptcy, he is asked to answer questions about how it can impact communities. And on Wednesday a federal judge allowed Detroit’s bankruptcy case, case number 13-53846 of the Bankruptcy Court for the Eastern District of Michigan, Southern Division to go forward after it was challenged by union and pension fund lawyers - so Mr. Feinstein is informing clients about the challenges facing the city.
Federal Judge Steven Rhodes handed down his decision to halt litigation against Detroit’s bankruptcy filing, the largest municipal bankruptcy filing in U.S. history. So in the case of this city and Kevyn Orr, its appointed emergency manager, the federal bankruptcy court has jurisdiction over the case and its developments.
The fallout over the bankruptcy filing began when a Circuit Court judge ruled that the filing violated Michigan's constitution and the rights of public employee pensions. Part of Orr’s bankruptcy plan is likely to cut pensions in order to reduce the city’s staggering $18 billion of debt. These actions could affect city workers such as police, firefighters, and retirees. An article in USAToday quoted Edward McNeil of the American Federation of State, County, and Municipal Employees, stating, “We are going to fight this all the way…we don’t believe the city should even be in bankruptcy court.”
The stance of McNeil and his proponents is that Orr and the city did not negotiate deals on the city’s debts that could have prevented the bankruptcy filing. They will argue that Detroit is not eligible to file for bankruptcy.
But Orr, along with Detroit’s mayor, argue that the city is too far gone financially and has no choice but to go through bankruptcy. They also want to take advantage of the automatic stay that goes into effect when a bankruptcy petition is filed. Judge Rhodes seems determined to see this through, saying, “My orders enhance the likelihood of Chapter 9 reorganization, speeds the bankruptcy case and cuts costs to taxpayers.”
“This does not mean, however, that Detroit’s bankruptcy is secure,” said Mr Feinstein. The judge’s actions do not decide whether the filing was in violation of the state’s Constitution. Nor does it state whether pensions should be protected or slashed.
All these issues will be addressed in the coming weeks and months as hearings continue. So Mr. Feinstein is keeping a close watch on the developments since they deal with issues of state pension plans, unions, responsibilities to bondholders, and the power of a state’s Constitution in federal court proceedings. All these issues could affect people filing for bankruptcy in Queens should a similar situation arise in New York. "We need to watch how this unfolds in the event that something like it occurs here in New York, City " said Mr. Feinstein.
Bruce Feinstein, Esq. and his team, located in Queens, New York, help clients who are filing for bankruptcy in Queens, Kings, and Nassau counties. Visit the Law Offices of Bruce Feinstein, Esq. at bfeinsteinesq.com or call (718) 514-9770 to reach his New York office.
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Bruce Feinstein, The Law Offices of Bruce Feinstein, Esq., PC, http://www.bfeinsteinesq.com, (718) 514-9770, [email protected]
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