The attorneys for the City of Detroit have filed papers in the U.S. Bankruptcy Court for the Eastern District of Michigan seeking to stay any and all proceedings against 36th District Court. The attorneys seek to enforce the bankruptcy stay to apply to the 36th District Court as part of the entire City of Detroit entity.
The lawyers argue that the Court is funded by the City, and therefore, must be considered covered by the bankruptcy stay.
Where the City’s lawyers try to tie together the City and Court, separate Michigan statutes created the two entities.
MCL 600.8121a creates the 36th District Court and states:
Sec. 8121a.
(1) The thirty-sixth district consists of the city of Detroit and is a district of the third class.
(2) Commencing September 1, 1981, the thirty-sixth district shall have 13 judges.
(3) Commencing January 1, 1982, the thirty-sixth district shall have 20 judges.
(4) Commencing January 1, 1983, the thirty-sixth district shall have 27 judges.
(5) Commencing January 1, 1985, the thirty-sixth district shall have 29 judges.
(6) Commencing January 1, 1989, subject to section 8175, the thirty-sixth district may have 2 additional judges. If new offices of judge are added to this district pursuant to this subsection, for the first general election only, the term of the candidate receiving the greatest number of votes shall be 6 years and the term of the next candidate receiving the greatest number of votes shall be 4 years.
If I represented the plaintiff’s suing the 36th District Court, I would point out that these are separate legal entities, created individually by separate Michigan statutes. Therefore, one entity cannot benefit from bankruptcy protections simply because its main revenue source comes from a separate legal entity that has filed bankruptcy.
Such a ruling would be akin to allowing bankruptcy protection for a parts manufacturer whose only revenue source was General Motors or Chrysler during those companies bankruptcies. As it would not have been fair for the parts supplier to get those protections, it is unfair for 36th District Court to get those protections.
Attorneys for the City of Detroit want a bankruptcy judge to put a hold on claims against 36th District Court, which is funded by the city.
In a document filed Wednesday, lawyers argued claims against parties of the court are really claims against the city and asked U.S. Bankruptcy Judge Steven Rhodes to extend the stay because of its Chapter 9 bankruptcy filing.
“Any judgments or awards entered against the 36th District Court parties in legal proceedings would essentially be judgments and awards against the city,” the filing said.
The court has been involved in numerous lawsuits, arbitration and other legal proceedings that may be affected, including a case in which the court was found liable for $5.5 million in back pay of four former officers, represented by the Michigan American Federation of State, County and Municipal Employees Council 25 and its Local 917.
“Michigan AFSCME Council 25’s position is that the hardworking employees that were unjustly terminated and unjustly treated should be justly compensated by 36th District Court,” said Robert Davis, chief negotiator for AFSCME for members at the court. “And their compensation should not be stayed.”
Detroit Free Press: http://www.freep.com/article/20130926/NEWS01/309260046/Detroit-bankrutpcy-36th-District-Court
