Michigan’s Governor has agreed to be deposed in the City of Detroit’s bankruptcy.
Lawyers for the state agreed to allow Gov. Rick Snyder, state Treasurer Andy Dillon and other state officials to be deposed by lawyers for creditors, a deal the federal judge overseeing the case said appeared to be a strong resolution to a fight over whether the Snyder administration would have to comply with subpoenas.
Under the agreement, depositions of the officials would last no more than three hours, and the scope of questioning would be limited to issues related to the city’s eligibility for Chapter 9 bankruptcy. The Michigan Attorney General’s Office agreed to waive executive privilege claims, but only on matters related to the process of authorizing Detroit’s bankruptcy petition, but not other matters.
The depositions must be completed before the Oct. 23 trial set in the city’s historic filing for bankruptcy protection.
U.S. Bankruptcy Judge Steven Rhodes offered to be available by phone should disputes arise during the depositions.
Earlier today, Rhodes appeared unhappy that lawyers for the state waited until 4:40 p.m. on Monday to file a new argument asserting a privilege that protects Snyder, state Dillon and others from having to appear for depositions sought by unions and other creditors.
Rhodes said he came into court this morning with half a mind to waive today’s hearing. He questioned Assistant Attorney General Margaret Nelson as to why, when she knew she was making a new argument last Thursday, she didn’t file a motion to adjourn the matter that day.
“Half of me came in willing to pound a gavel and make a waiver,” he said, asking how the other side was expected to respond in court with so little warning.
He also questioned how the state couldn’t have foreseen the line of questioning lawyers are putting forward.
“It’s hard for me to imagine what you thought they were going to ask the governor in a deposition other than that,” Rhodes said. “That has been clear from the start.”
The lawyers for creditors want to depose Snyder, Dillon and Snyder aide Richard Baird on the thought process behind authorizing Detroit’s historic Chapter 9 municipal bankruptcy filing, the largest of its kind in U.S. history.
State lawyers argued late Monday that testimony from Snyder and his aides about eligibility for bankruptcy is not relevant and involves privileged information.
Lawyers for the Michigan Council 25 of the American Federation of State, County & Municipal Employees as well as the UAW say they must be able to take discoveries of key officials, under oath, to cover all the issues of their objections to the city’s eligibility for Chapter 9. Depositions were also sought for top Snyder adviser Baird, Auditor General Thomas McTavish and Frederick Headen, legal adviser for the Michigan Department of Treasury. The unions also seek additional documents from the state.
Attorney General Bill Schuette’s office filed a motion Aug. 30 to quash the subpoenas, arguing that the state officials would not provide additional insight into the eligibility question. The lawyers called them “outside the scope of discovery allowed” and said they constitute an “unnecessary and undue burden.”
Detroit Free Press: http://www.freep.com/article/20130910/NEWS01/309100017/detroit-bankrupty-hearing
