Sparring opens Detroit bankruptcy trial

DETROIT — An attorney for Detroit urged a judge on Wednesday to allow the city to fix staggering financial problems through bankruptcy, arguing that without it about 65 cents of every tax dollar would eventually be gobbled up by debts and other obligations.

If the judge finds certain requirements were met, the city would get the green light to restructure $18 billion in debt and possibly slash pensions for thousands of people.

Hundreds of protesters walked in a circle outside the courthouse with signs that said, ‘‘Bail out people not banks.’’


Attorney Bruce Bennett said he ‘‘could stand here for hours’’ to describe the ‘‘mountain of evidence’’ that shows Detroit is insolvent. ‘‘This is one of those cases where the data speaks very clearly and persuasively on its own,’’ Bennett told Judge Steven Rhodes.

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Attorneys representing unions, pension funds, and retiree groups didn’t seem to challenge the ruinous condition of Detroit’s finances but zeroed in on a key test under bankruptcy law: Did the city negotiate with creditors in good faith before the Chapter 9 filing? No, they said.

Sharon Levine of the American Federation of State, County and Municipal Employees said talks between Detroit and its unions should have lasted months, not weeks. Another lawyer, Babette Ceccotti with the United Auto Workers, said the bankruptcy filing was aimed at using federal law to attack pensions, which otherwise are protected under the Michigan Constitution.

‘‘Chapter 9 was already a forgone conclusion’’ before the city last met with creditors a week before the filing, Green said.