Detroit Bankruptcy Judge Allows Appeal, Asks Higher Court To Reject


The judge in the Detroit bankruptcy case on Friday recommended that a federal appellate court refuse to allow a direct appeal of his recent decision declaring the city eligible for bankruptcy protection.

U.S. Judge Steven Rhodes, in a written decision issued four days after he heard arguments over the legal path of the appeal, said he is required to certify the appeal directly to the U.S. 6th Circuit. Still, he recommended that the higher court reject it and allow his court to embark on the process of resolving the city's financial insolvency without the interruptions a simultaneous appeal would impose.

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On Monday, Rhodes said from the bench that he would allow for the appeal to bypass the district court, but he delayed a ruling on whether he would ask the higher court to expedite the appeal.

But in his written ruling, Rhodes wrote that he recommended that the appeals court not take up the appeal because it would be best to let the bankruptcy court decide whether to approve the city's plan to adjust its debt quickly and completely without the added burden of an appeals process.

"It is time now to begin that discussion, unfettered by piecemeal appellate litigation," Rhodes wrote.

Rhodes wrote he is still maintaining a March 1 deadline for Detroit to submit its plan of adjustment. But Detroit Emergency Manager Kevyn Orr has said that the city plans to submit its plan in early January.

(Reporting by Joseph Lichterman; Writing by Dan Burns; Editing by James Dalgleish and Dan Grebler)