Veteran federal judge to handle Detroit bankruptcy amid confusion over filing

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Detroit's descent: Largest bankruptcy in US history

FBN's Lauren Simonetti reports from New York

A long-time federal judge has been appointed to handle Detroit's bankruptcy amid a court ruling Friday that states the filing violates the state’s constitution and must be withdrawn.

The judge, Steven Rhodes, has worked in U.S. Bankruptcy Court for nearly 30 years. He was appointed Friday by Alice Batchelder, chief judge at the federal appeals court that covers Michigan.

Ingham County Judge Rosemarie Aquilina ruled Friday that Gov. Rick Snyder and Detroit Emergency Manger Kevyn Orr overstepped their authority and violated state law by proceeding with the bankruptcy filing because they knew the outcome could affect benefits to thousands of Detroit residents.

“I have some very serious concerns because there was this rush to bankruptcy court that didn’t have to occur and shouldn’t have occurred,” Aquilina said, in a spate of orders arising from three separate lawsuits.

Orr, who filed the bankruptcy document Thursday, has yet to respond the judge’s ruling, and there is no indication so far that city officials plan to take any action in response to the ruling.

Aquilina also said Michigan’s constitution prohibits actions that will lessen the pension benefits of public employees, including those in the city of Detroit.

“Plaintiffs shouldn’t have been blindsided,” and “this process shouldn’t have been ignored,” Aquilina said.

Lawyers representing pensioners and two city pension funds got an emergency hearing with Aquilina on Thursday at which she said she planned to issue an order to block the bankruptcy filing. But lawyers and the judge learned Orr filed the Detroit bankruptcy petition in Detroit five minutes before the hearing began.

Rhodes has the endorsement of the chief judge at the Bankruptcy Court as well as many federal judges across the street at U.S. District Court.

He is described by colleague Phillip Shefferly as one of the "most accomplished" in his field in the country. He says Rhodes was the unanimous choice of other judges at the court.

Rhodes has presided over many complex cases. He also plays guitar in a band called The Indubitable Equivalents, a reference to a concept in bankruptcy law.

The Associated Press contributed to this report.