Detroit's two public pension funds will file an objection on Monday to the city's bankruptcy filing on Michigan constitutional grounds, a representative of the pension boards said, Reuters reported yesterday. The pension funds’ expected challenge is the first to emerge from among several parties likely to object to the city of Detroit's claim that it is bankrupt. For Detroit's chapter 9 bankruptcy to proceed Bankruptcy Judge Steven Rhodes must first find the city has proved it is insolvent and negotiated in good faith with its creditors, or that there were too many creditors to make negotiation feasible. The city's two pension boards will claim that Michigan Governor Rick Snyder violated the state's Constitution when he allowed Detroit's state-appointed emergency manager, Kevyn Orr, to make the bankruptcy filing. The pension boards also will claim Detroit violated state constitutional language that prohibits the impairment of vested retirement benefits for public workers, said Bruce Babiarz, spokesman for the Police and Firefighters Retirement System.
