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Judge gives creditors permission to loot Detroit's pensions

As always, it's workers who end up suffering the most.

Judge Rules Detroit Bankruptcy Can Proceed, Guaranteeing Pension Cuts


Detroit’s bankruptcy may proceed, Judge Stephen Rhodes ruled Tuesday morning in a decision that eliminates the last, best hope retired city workers had of retaining the pensions and health care benefits they were promised. Rhodes further ruled that a provision in the Michigan constitution that protects pensions is not applicable here, wiping out the only other significant defense retirees had from cuts.

At one point in Rhodes’ hour-long reading from the bench, he warned lawyers for the city that he will not “lightly or casually” approve cuts to pensions in the final bankruptcy resolution deal. At another, he said emergency manager Kevyn Orr “did mislead the public about the status of pensions in bankruptcy.” But those gentle reprimands will provide little comfort to the city’s 20,000 retired employees who lost their last buffers against health care cuts that begin early next year and pension cuts that are likely to be severe. If the city’s retirees are to avoid cuts, it will be because of charity rather than the legal system.