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Detroit to deal with lawsuits en masse

Nov. 11, 2013 at 11:14 AM   |   Comments

DETROIT, Nov. 11 (UPI) -- A spokesman for Detroit's emergency manager, Kevin Orr, said the city would meet Tuesday's deadline for a resolution to city lawsuits.

The city has more than 500 civil lawsuits filed against it, some of which are minor and do not involve much money and some that are complicated and could be costly, The Detroit News reported Monday.

As varied as they are, bankruptcy Judge Steven Rhodes in October gave Detroit until Tuesday to come up with a plan to deal with all of them.

"We will file a resolution plan with the court in the time specified by Judge Rhodes," said Bill Nowling, representing Orr.

"The only progress report is that it is in progress," Nowling said.

Similar to a liquidation sale, Detroit is, to use the proper legal term, liquidating its lawsuits, although in this case it is not selling them, but only putting a price on them, the News said.

Some of the plaintiffs could then be dealt with like creditors and settle their cases at a certain rate – 10 cents on the dollar, for example, the News said.

For some that would mean a quick resolution to a lawsuit with some returns on their efforts, although the returns would be small compared to what they might have been.

The sheer number of cases is unprecedented for a bankruptcy because Detroit is the largest municipality to ever file for Chapter 9 protection.

"Detroit is a Herculean task," said Marc Levinson, an attorney who has worked on two municipal bankruptcies in California -- Stockton and Vallejo.

"I admire Judge Rhodes for trying to bring this to the forefront. This is a way of dealing with an awful, awful lot of claims, and each one could be a drain on the city's time and resources. Every one that the court manages to settle is that much less of a drain on the city attorneys' time and budget," Levinson said.

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