Rhodes tries to push human impact of case to the forefront
By Jeff Karoub
Associated Press
DETROIT (AP) — Much of what you need to know about Judge Steven Rhodes, friends and former colleagues say, can be gleaned from a handful of hours amid the hundreds he’s logged overseeing the largest public bankruptcy filing in U.S. history.
On a September day in Detroit’s grand federal court building, the veteran bankruptcy judge invited retirees and residents to tell him what the city’s massive restructuring would mean for them. Each had three minutes, but Rhodes was generous with the clock and let them have their say.
He didn’t have to do it.
“There is no requirement that a bankruptcy judge has to listen to individuals who are represented by (lawyers),” said former bankruptcy Judge Ray Reynolds Graves, who worked with Rhodes for 17 years. “Steve put that to one side and had the retirees come into court and address him personally. Listening to people who could be adversely affected by having their pensions cut — that tells you something about the man’s sensitivities.”
Rhodes’ character and conduct are more closely scrutinized since last week’s ruling that Detroit was eligible to fix its broken finances in bankruptcy court. Friends and colleagues say the chief bankruptcy judge in Detroit — approaching retirement himself — aims to push the human impact to the front of an often arcane, impenetrable case of creditors and complex financial formulas.
Many workers and retirees were crushed to hear him say their pensions aren’t protected by the Michigan Constitution and could be cut, though his order came with a less legal and more reassuring caveat: He vowed to be sensitive to how retirees are treated and won’t “lightly or casually” approve any reductions.
Much of what the broader public knows about the grandfather who also plays rhythm guitar in a band of bankruptcy officials is through what he’s said in court — particularly his 90-minute oral opinion on the day he greenlighted the bankruptcy. And on the bench he isn’t reluctant to express his views, often striking a populist tone. Michigan Gov. Rick Snyder took the unprecedented step of testifying at trial about his role in approving the bankruptcy filing only after the judge strongly suggested that his attendance would not be excused.
During the eligibility trial, Rhodes sharply questioned Detroit emergency manager Kevyn Orr about a summer comment that pensions are “sacrosanct” and wouldn’t be touched.
“What would you say to that retiree now?” Rhodes asked, a reference to Orr’s subsequent decision to propose cuts to pensions.
At another hearing, an investment banker, James Saakvitne, said it was important that his firm help the city but only under certain confidential terms.
“What’s very important to you is to make money,” the judge interjected.
Those exchanges, said Wayne State University law professor Laura Bartell, reveal his professional bearings. She said in his nearly 30 years on the bench in Detroit, Rhodes has guided far more individuals through the bankruptcy process than public or private entities. Detroit’s other most famous bankruptcy reorganizations, General Motors and Chrysler, were filed in New York.
“You’ve got to remember, bankruptcy in Detroit is about people,” said Bartell, who has invited Rhodes to speak to her classes and knows him through academic circles because of his roles as an adjunct professor and lecturer at the University of Michigan Law School, his alma mater. “He’s not going to allow big-city lawyers to come in and tell him that people are not important.”
Both Bartell and University of Michigan law professor John Pottow say Rhodes was the right judge selected to oversee the complex and unusual case, and he accepted the assignment as he was planning to retire.
“He’s going to stay on ... because he wanted to finish this case out,” Pottow said.
Pottow said Rhodes realizes “the plight of the city and workers,” who lack the federal pension protections of their private sector counterparts.
“This case is moving him,” said Pottow, who also welcomes Rhodes back to speak and teach. “Rhodes is trying to shame the political leaders to do something about this. ... There’s a moment where he can say things, and I think he’s taking advantage of the moment.”
When he’s free of the dark robe, he plays in a band, the Indubitable Equivalents. The band’s web site says the off-hours rhythm guitarist first serenaded his wife, Kathy, then his daughters and granddaughters, with songs such as “Sound of Silence,” “Eve of Destruction” and “Sloop John B.”
Another piece of his past diverges from jurisprudence, at least at first blush: Rhodes received a bachelor’s degree in mechanical engineering from Purdue University in 1970, three years before earning his law degree at Michigan.
Graves said he used to tease Rhodes about being “half-Boilermaker and half-Wolverine,” but the retired judge said Rhodes puts his first degree to good use.
“As an engineer, he wants thoroughness, completeness and precision — he’s not a fan of sloppy lawyering,” Graves said. “I’d say to him, ‘Human beings are messy and sloppy. If they weren’t, we wouldn’t have these jobs.’”
Graves said Rhodes isn’t likely to leave any loose ends, something that’s important in such a high-profile case.
“He knows he’s writing on a blank slate — a new law for the country — and he wants to get it right,” Graves said. “Chapter 9 is a new model for all distressed cities in the country. ... He’s not passing this off on anybody else.”
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