U.S. Bankruptcy Judge Steven Rhodes, one of Detroit's most experienced
judges known for running a strict courtroom, has been picked to oversee the
Detroit's historic bankruptcy case, the biggest such filing in the nation's
history involving more than $18 billion in debts that officials say piled up
over 60 years.
And just as legal experts had predicted, Detroit's financial fate will rest in the hands of a hometown judge who has more than just legal skills. Outside the courtroom, Rhodes plays rhythm guitar in a classic rock house band called the Indubitable Equivalents, according to the band's website. The group says it's the band of the American Bankruptcy Institute (ABI), a trade association for bankruptcy professionals, and that Rhodes picked up his guitar skills from his father at the age of 15, later serenading his wife with tunes such as "Sound of Silence" and "Eve of Destruction."
The latter song is fitting for the historic municipal bankruptcy case that Rhodes would inherit decades later.
Rhodes, a University of Michigan Law School graduate who has been a bankruptcy judge in the Eastern District of Michigan since 1985, also has ties to the region, unlike those who oversaw the bankruptcy cases of Detroit automotive giants General Motors and Chrysler. Their bankruptcy cases were filed in New York.
Detroit's will stay here, where, as legal experts explained, all of its assets are.
Some local bankruptcy attorneys, who declined to be named because they practice before Rhodes, describe his demeanor as unpleasant and difficult.
Southfield bankruptcy attorney Neal Brand, who has handled dozens of cases before Rhodes, believes Rhodes is the perfect fit for Detroit's bankruptcy case. He described Rhodes as a fair judge who gives second chances but doesn't like his time wasted by ill-prepared lawyers and "he doesn't take bull(expletive)."
"He's the Scotty Bowman of judges. He knows what (lawyers) are going to do, what they're going to say, and he's always ready for it," said Brand, who believes no lawyer will sneak anything past Rhodes. "No one is going to trick him. He's going to force the attorneys to be in their A-game."
Some of the judge's toughness was demonstrated in a 2005 head-to-head debate, in which Rhodes took on noted UCLA law professor Lynn LoPucki about various controversial aspects of bankruptcy law.
LoPucki, a nationally recognized bankruptcy law specialist, had written a book called, "Courting Failure: How Competition for Big Cases Is Corrupting the Bankruptcy Courts."
During the debate, Rhodes attacked LoPucki's theories and took issue with the book.
"The bottom line is that this book is an inflammatory attack on the judges in New York and Delaware," Rhodes told LoPucki at the time.
In recent years, Rhodes has handled bankruptcy cases such as Awrey Bakeries, Simplified Employment Services and Collins & Aikman, a complex case that involved large debts resulting from an aggressive acquisition strategy.
Rhodes, also a former federal prosecutor and magistrate, also taught at the U-M Law School from 1992-2002.
Before becoming a bankruptcy judge in the Eastern District of Michigan, he served on the Bankruptcy Appellate Panel of the 6th Circuit U.S. Court of Appeals.
He also formerly served as a law clerk for U.S. District Judge John Feikens, who oversaw Detroit's troubled water department. Last year, he coauthored "The Ponzi Book: A Legal Resource for Unraveling Ponzi Schemes."
Rhodes was assigned to Detroit's bankruptcy case by Alice Batchelder, chief judge of the U.S. 6th Circuit Court of Appeals, following a recommendation from the two chief judges in the Eastern District of Michigan.
"I have canvassed each bankruptcy judge in the Eastern District of Michigan," Chief Bankruptcy Judge Phillip Shefferly wrote in a letter to Batchelder, concluding: "Rhodes is the bankruptcy judge best qualified to preside over the City of Detroit Chapter 9 case."
Rhodes, meanwhile, already has a request to consider. The city has asked him to hold a hearing on July 23, or as soon as possible, to consider a slew of actions that were filed in the last 24 hours.
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