A lawyer representing Detroit's largest public union argued yesterday that chapter 9 municipal bankruptcy is unconstitutional because it impairs states' rights to manage their own finances, Reuters reported yesterday. "States are ceding accountability for their own financial management," attorney Sharon Levine, representing Council 25 of the American Federation of State, County and Municipal Employees, said in a hearing before Bankruptcy Judge Steven Rhodes. "By turning it over to the federal government and hiding behind the bankruptcy process, we lose that accountability which is a cornerstone of the state constitution." Levine argued that it should be left to the states to restructure municipal debt because chapter 9 unfairly requires a municipality to settle debts in federal bankruptcy court without full consent from all its creditors. Yesterday marked the start of a two-day hearing that will address the thorny legal issues surrounding Detroit's July 18 bankruptcy filing, the biggest in U.S. history.
