Detroit, which filed the biggest U.S. municipal bankruptcy on Thursday, asked a federal judge to set an initial hearing in the case as soon as July 23 to confirm that the city is entitled to routine protections from creditors, Bloomberg News reported on Friday. The city faces about $18 billion of debt it must restructure and asked Bankruptcy Judge Steven W. Rhodes to confirm those and other rights routinely granted in bankruptcy. The request comes after a state court judge ordered Governor Rick Snyder to withdraw the bankruptcy petition, claiming that the case violates Michigan’s constitution. Circuit Court Judge Rosemarie E. Aquilina is overseeing cases brought by current and retired city workers who asked for a temporary restraining order to keep the city out of bankruptcy. Detroit’s chapter 9 petition was filed minutes before the judge was able to rule. Kenneth Klee, the bankruptcy lawyer who is leading the bankruptcy restructuring of Jefferson County, Alabama, said a state judge can’t force Detroit out of federal bankruptcy, even if Snyder agrees to try to withdraw. The case is City of Detroit, 13-bk-53846, U.S. Bankruptcy Court, Eastern District of Michigan (Detroit).
