The U.S. Justice Department on Friday defended the constitutionality of chapter 9 bankruptcy after several Detroit creditors challenged the law in a bid to derail the city’s bankruptcy filing, the Detroit Free Press reported on Saturday. The U.S. government filed a memorandum in bankruptcy court rejecting challenges to chapter 9 from several creditors — notably including Michigan Council 25 of AFSCME, Detroit’s largest employee union. The government did not address whether the city of Detroit is eligible for bankruptcy or whether it should be allowed to enact pension cuts, which remains a key point of contention.
