AG's office argues on behalf of Detroit EM

DETROIT (AP) -- A lawyer for Michigan has told a federal judge that Detroit's efforts to restructure during bankruptcy would be in jeopardy without Kevyn Orr as its emergency manager.

Assistant Attorney General Margaret Nelson supports Orr's decision to seek bankruptcy and told U.S. District Judge Steven Rhodes Wednesday that the law that led to Orr's hiring is constitutional.

Rhodes is holding hearings ahead of next week's trial to determine whether Detroit is eligible for bankruptcy. The hearings started Tuesday.

Lawyers for city unions, retirees and pension funds say that Michigan's emergency manager law is unconstitutional and that Orr will use bankruptcy to cut municipal pensions.

They say pensions are protected by Michigan's Constitution.

Orr says Detroit has $18 billion or more debt, and that pensions are underfunded by $3.5 billion.

Published: Fri, Oct 18, 2013