DETROIT BK UPDATE: Federal BK Judge Rhodes said hell allow pension cuts in Detroits bankruptcy. Rhodes emphasized that he won’t necessarily agree to pension cuts in the city’s final reorganization plan unless the entire plan is fair and equitable. Rhodes comments on pension cuts may well prove to be extremely important not just for Detroit, but for any city currently in bankruptcy or considering bankruptcy . . . The judge said that pensions are no different from other contracts under federal bankruptcy laws and not entitled to any heightened protection in bankruptcy. That’s a big deal. Pension protectors have been trying to argue that public employee pension benefits can’t be cut back and are protected by state laws or within state constitutions. Federal bankruptcy courts don’t have to care. Cities like Stockton and Vallejo, Calif., have resisted trying to change their pension plans even while in bankruptcy. Maybe this ruling will give city leaders the political courage to address one of their biggest sources of budget debt. reason/blog/2013/12/03/welcome-to-bankruptcy-detroit
Posted on: Tue, 03 Dec 2013 18:46:23 +0000
Trending Topics
Recently Viewed Topics
© 2015