Detroit is the largest city to be forced to declare bankruputcy, in part due to union officials’ extorting huge sums of money from taxpayers to pay for incredibly lucrative pensions for city union members.
Nathan Bomey, Brett Snavely, and Alissa Priddle, have the story in the Detroit Free Press.
The city of Detroit today officially became the largest municipality in U.S. history to enter Chapter 9 bankruptcy after U.S. Bankruptcy Judge Steven Rhodes declared it met the specific legal criteria required to receive protection from its creditors.
The landmark ruling ends more than four months of uncertainty over the fate of the case and sets the stage for a fierce clash over how to slash an estimated $18 billion in debt and long-term liabilities that have hampered Detroit from attacking pervasive blight and violent crime.
Rhodes — in a surprise decision this morning — also said he’ll allow pension cuts in Detroit’s 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.