Yes!
The process of getting an emergency manager appointed has numerous safeguards in it and essentially is no different than a Chapter 11 bankruptcy. A city has to be insolvent to even get the process started. It is then given an opportunity to put together a plan to get out of insolvency. Only after all of the efforts by the city fail is an outside manager appointed.
Michigan has had the power to appoint an emergency financial manager for many years. The new law enhances his or her power to void contracts, etc. Once the city regains solvency, the manager is removed.
How does a state legislature grant someone the power to void contracts?
We started chatting about this on this post too, maybe you can share on this thread too
http://www.freerepublic.com/focus/news/2688474/posts