What does Playboy Playmate Anna Nicole Smith have to do with Detroit's Chapter 9 bankruptcy?

DETROIT (WXYZ) - The late Anna Nicole Smith could have an effect on Detroit's bankruptcy. 

A case she had before the US Supreme Court ended in a ruling that limits the power of bankruptcy judges.

A lot of attorneys are looking up the case of Stern v. Marshall - Anna Nicole Smith's legal name was Vicky Lynn Marshall. 

She's remembered more for her buxom beauty than her legal briefs.
But a closer look at Stern v. Marshall shows the US Supreme Court just 2 years ago split 5-4 in ruling bankruptcy judges have limited power to decide state issues.

That's important in the Detroit case because 32,000 retired and active Detroit city workers face cuts in their pensions.

The pensions are underfunded by $3.5 billion.

Public employee pensions are protected against cuts by the Michigan constitution.

Can bankruptcy judge Steven Rhodes decide the cuts? Does it need to go to a federal district judge?

This is an important legal question even Michigan's attorney general is reviewing.

He entered the bankruptcy case yesterday to argue pensions are protected.

I've checked with several attorneys, they are reviewing this and could bring in a motion in the days ahead.

So what's the next step in bankruptcy court?

Everybody is back in court on Friday, where the city wants a committee of retirees to be set up to negotiate cuts in pensions and their health care.

We also have a date, October 23, for a trial on objections to Detroit being eligible for bankruptcy. 

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