Detroit Bankruptcy Update: Direct Appeal to Sixth Circuit Permitted

By: J. Ellsworth Summers, Jr. & Scott St. Amand

Yesterday Bankruptcy Judge Steven Rhodes ruled that the appeals to his earlier holding that Detroit was entitled to proceed in its Chapter 9 Bankruptcy proceeding would be allowed to bypass a federal district court and head straight to the U.S. Court of Appeals for the Sixth Circuit.

What remains to be seen is whether Judge Rhodes will ask the appeals court to take up the matter in an expedited fashion.  Attorneys for the city’s pension funds contended that the expedited appeal would not hinder Detroit’s ongoing mediation with its creditors or the city’s ability to submit its restructuring plan to the court, which plan is slated to be submitted in early January.