CHICAGO — Litigation is already stalling Detroit's effort to file for Chapter 9 bankruptcy protection.

A day after the city's historic bankruptcy filing last Thursday, an Ingham County judge issued an order ruling that Detroit must withdraw the petition because it is unconstitutional.

Michigan attorney general Bill Schuette said Friday he would appeal the judge's order in the Michigan Appeals Court, a decision that could come early this week.

On Monday, attorneys for Detroit emergency manager Kevyn Orr petitioned the court to move the lawsuit to U.S. District Court, which would give the bankruptcy court the authority to rule.

Orr also asked the federal court to hold a hearing Tuesday to confirm the city's right to be in bankruptcy. If the court affirmed the right, it would put a stop to all lawsuits and legal actions swirling around the beleaguered city.

Also Monday, the pension funds that are suing to halt the city's bankruptcy asked the federal judge to delay the start of the case until a state appeals court rules on the Ingham County circuit court ruling.

Ingham County Circuit Judge Rosemarie Aquilina held a brief hearing Monday morning, asking the pension systems to file briefs this week and setting a new hearing for next Monday, July 29.

Steven Rhodes is the federal bankruptcy judge appointed Friday to oversee the case.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.