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DETROIT (Reuters) - The judge overseeing Detroit's bankruptcy filing will allow Detroit property owners to file tax appeals despite a stay preventing all legal action against the city while it is in bankruptcy court.
Judge Steven Rhodes ruled Tuesday that property tax appeals could be filed but that property owners can't collect on any decision or refund without prior approval from the court.
The order is retroactive to July 31. Resnick & Moss P.C., a suburban Detroit law firm, filed the motion to obtain a ruling on behalf of its clients, and Rhodes' order applies to the firm.
Rhodes issued a similar order last month to allow Michigan Property Tax Relief LLC to file property tax appeals.
Detroit filed the largest municipal bankruptcy in U.S. history on July 18, and all legal actions against the city were suspended as part of the filing as Detroit tries to restructure more than $18 billion in debt.
Detroit's emergency manager, Kevyn Orr, supports lifting the stay because the property tax claims don't directly pertain to the bankruptcy filing and the city doesn't want to get in the way of the legal process, Orr's spokesman Bill Nowling said.
The Michigan Tax Tribunal in Lansing, the state capital, hears tax appeals for all Michigan taxes, including property taxes.
Reporting by Joseph Lichterman and Bernie Woodall; Editing by Prudence Crowther