In a legal field typically dominated by males, three women are leading the Detroit Chapter 9 bankruptcy filing. Representing labor unions are prominent attorneys Sharon Levine and Babette Ceccotti, while representing the city is bankruptcy attorney Heather Lennox. The unions are disputing Detroit’s right to file for Chapter 9 protection, say Ms. Levine and Ms. Ceccotti, who are fighting to protect the benefits and pensions of their constituencies.
Detroit’s Chapter 9 Faces Hurdles
The stakes are high: Ms. Lennox stresses the city’s desperate financial straits and its need for fiscal relief, while the unions are prepared to fight tooth and nail for the pensions and wages owed its thousands of workers and retirees.
Ms. Lennox has spent the better part of two decades representing companies in the auto, steel and mining industries, specializing in restructuring arrangements such as the one Detroit is seeking, albeit on a slightly smaller scale. Recently she guided Hostess Brands Inc. through their Chapter 11 restructuring, where they faced a similar issue with employee unions. In the Hostess case, things turned rather ugly, with employees trying to block the bankruptcy filing by striking, while the company responded by liquidating assets and forcing many into unemployment.
Obviously Ms. Lennox is seeking to avoid such contentious developments in Detroit’s case. The pressure is on to resolve the debate with a minimum of antagonism, ideally avoiding further litigation. The common thread to follow is that bankruptcy attorneys on both sides want the city to recover from its $18 billion debt and move forward into a better future.