Judge OK's Detroit Bankruptcy, Puts Public Pensions Under the Axe

[unhappycamper]

http://www.commondreams.org/headline/2013/12/03-1



Detroit emergency manager Kevyn Orr speaks at a March 2013 news conference in Detroit next to Michigan Gov. Rick Snyder

Judge OK's Detroit Bankruptcy, Puts Public Pensions Under the Axe
- Common Dreams staff
Published on Tuesday, December 3, 2013 by Common Dreams

U.S. Bankruptcy Judge Steven Rhodes ruled Tuesday that the city of Detroit is eligible for bankruptcy after a long court battle between city appointed 'emergency manager' Kevyn Orr and union and labor activists who say the decision paves the way for workers' pensions to be cut.

Rhodes ruled that Detroit is insolvent, a legal criteria for bankruptcy, meaning it can cut public pensions for the bankruptcy filing.

Critics say the city bankruptcy filing, the first of its kind, is an attack on pensions and future livelihoods for workers in the city of Detroit and across Michigan.

As the Detroit Free Press reports:

The plan is expected to include controversial cuts to unsecured creditors and asset sales, including a potential spinoff of the water and sewer department and the possible sale of Detroit Institute of Arts property.

[beachbum bob]

1. the sad fact is clear

when you have little revenue growth and runaway pension and benefit cost the choices are limited. Many private sector workers have lost pensions when their employers went belly up....

this will not stop with just Detroit I am afraid. Too many state, county and cities have similar issues of runaway cost and little hope with increasing revenues as the taxpayers are already overburdened in to many of these cases. This economic mess been predicted for decades and should be of no great surprise.

Here in Illinois a pension reform bill just passed and unless the Governor veto's it, becomes law and my wife who is a state worker, will lose out on 10's of thousands of dollars (during her lifetime collecting a pension) ...but losing some is better than having none. Our city is faced with 40% of its budget going out on retirement/pension payments and its growing.....completely unsustainable and we definitely have bankruptcy looming sometime in the future.