Home

Detroit Bankruptcy Plan Pinches Pensions
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

On July 18, 2013 the city of Detroit filed for Chapter 9 bankruptcy.  This is a legal status of a person or other party that cannot repay the debts it owes to creditors. Estimated at $18–20 billion, Detroit is the largest municipal bankruptcy filing in U.S. history by debt. Detroit is also the largest city by population in the U.S. history to file for Chapter 9 bankruptcy. Bankruptcies of cities, towns, villages and counties since the Great Depression are rare, and there have only been about 60 since 1950.

Detroit’s population has declined from a peak of 1.8 million in 1950; to what recently, the New York Times has called the city “home to 700,000 people, as well as to tens of thousands of abandoned buildings, vacant lots and unlit streets.”

  
What
Where


Now according to Money CNN, Detroit city employees and retirees can face losing up to 34% of their promised pension benefits under the city’s bankruptcy plan. The 34% pension cut would be on general city employees and retirees from most departments. The city’s debt-adjustment plan is built on $820 million in contributions from private foundations and the state. According to Bloomberg Business week, Detroit’s new plan to end its $18 billion bankruptcy assumes bondholders offered 20 cents on the dollar will eventually swallow a deal that guarantees police and firefighters collect 90 percent of their pensions.

A spokeswoman for the city’s pension funds, Tina Bassett, reported “We are greatly disappointed that the plan contains debilitating and unnecessary cuts to…pension benefits.”

Bloomberg News reported that the American Federation of State, County and Municipal Employees said in a statement, “Retirees cannot survive these huge cuts to the pensions they earned. The plan is unfair and unacceptable.”

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!




Kevyn Orr, The city’s emergency financial manager, told reporters “We need a settlement from everybody.” His plan offers reduced cuts. The restructuring in Detroit will allow the city to carry on with its most critical operations as well as get a better deal on some of the costlier union plans that it engaged in.

Image Credit: www.theguardian.com





 

Interesting Legal Sites You May Like


BCG FEATURED JOB

Locations:

Keyword:



Search Now

Oil and Gas Attorney

USA-TX-San Antonio

San Antonio office of our client seeks oil and gas attorney with experience. The candidate will assi...

Apply Now

Mid-level Federal Income Tax Associate Attorney

USA-WA-Seattle

Seattle office of our client seeks mid-level tax associate attorney with 3-5 years of experience in ...

Apply Now

Litigation Attorney

USA-NJ-Red Bank

Red Bank office of our client seeks litigation attorney with 3-5 years of experience. The candidate ...

Apply Now

RELEVANT JOBS

Associate Attorney

USA-MD-Towson

Job Description: Progressive environmental and land use firm seeks Maryland-licensed lawyer to join ...

Apply now

LITIGATION ASSOCIATE ATTORNEY

USA-CT-Westport

Small civil litigation firm is looking to hire a full-time attorney for our Westport, CT office. Can...

Apply now

Administrative Coordinator

USA-CA-Torrance

Administrative Coordinator: TAKI LAW OFFICES, A PROFESSIONAL CORPORATION seeks a full-time (40 hrs/w...

Apply now

MID-HUDSON NY LAW FIRM ATTORNEYS & PARALEGALS WANTED

USA-NY-Chester

Attorneys and paralegals wanted for a fast growing Mid-Hudson NY commercial law firm with clients th...

Apply now

SEARCH IN ARCHIVE

To Top