3 hours ago
Paul Sancya / AP
Protesters carry a sign outside the Levin Federal Courthouse in Detroit, Wednesday, July 24, 2013. Detroit's bankruptcy is hitting a courtroom for the first time as a judge considers what to do with challenges from retirees who claim their pensions are protected by the Michigan Constitution.
The federal judge overseeing Detroit's bankruptcy case said he expects to issue some rulings Wednesday in the city's closely followed insolvency.
Judge Steven Rhodes said he would rule on motions to stay other pending court cases related to the bankruptcy, among other matters.
The judge's decision could impact dozens of other states and cities facing financial stress for years to come. The hearing is the latest legal skirmish pitting the city's state-appointed emergency manager against more than 100,000 creditors, including pensioners, as lawyers for all sides are sailing in uncharted waters.
Rhodes is expected to rule on whether U.S. law trumps the state?s constitutional protection against rescinding retired city workers? pensions. Bond holders who have relied for centuries on a government?s ?full faith and credit? to repay their investments will be there to argue their case.
Lawyers for unions who opposed last week's historic Chapter 9 bankruptcy filing are expected to make a last-ditch argument that the law which granted the city's emergency manager, Kevyn Orr, the authority to make the bankruptcy filing violates the state's constitution.
Bankruptcy lawyers say that argument faces an uphill legal battle because federal courts typically have the power to interpret state constitutions.
This story is developing. Please check back for further updates. CNBC's John W. Schoen contributed to this report.
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