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

Mid-level Litigation Associate Attorney

USA-MD-Baltimore

Baltimore office of our client seeks mid-level litigation associate attorney with 3+ years of experi...

Apply Now

Litigation Associate Attorney

USA-SC-Columbia

Columbia office is seeking a commercial litigation attorney with 2-4 years of experience.

Apply Now

Junior Employment Litigation Attorney

USA-CA-San Francisco

San Francisco office is seeking an attorney with 2-3 years of employment litigation, class action or...

Apply Now

Senior Leveraged Finance Attorney

USA-NY-New York City

New York City office is seeking a senior leveraged finance attorney with 12+ years of experience. Ca...

Apply Now

RELEVANT JOBS

Social Security Legal Assistant - Immediate Opening!

USA-PA-Scranton

Scranton-based workers comp, social security, and personal injury law office is seeking a social sec...

Apply now

Nurse Paralegal

USA-NY-New York City

McGivney, Kluger & Cook\'s New York City office seeks a nurse paralegal to join our team! Respons...

Apply now

Associate Attorney

USA-NY-New York City

Law firm seeks associate that must be admitted to practice law in New York  to attend Civil cou...

Apply now

Director of Enforcement

USA-PA-Philadelphia

DIRECTOR OF ENFORCEMENT POSITION AVAILABLE The Fair Housing Rights Center in Southeastern Pennsyl...

Apply now

SEARCH IN ARCHIVE

To Top