The Shadow of Detroit: Pension Gaps Threaten Cities and States

by Lou Cannon Detroit's bankruptcy made a brief splash last month before being driven from the headlines by terrorist warnings, congressional intransigence and the sexual shenanigans of a New York City mayoralty candidate and the San Diego mayor. But as a possible portent for other cities and...

Detroit's Bankruptcy: the Pension Issue

Judge Rhodes ruled yesterday that the city's bankruptcy can proceed. He also ruled that the state constitutional provision that protects state employees' pensions from being diminished or impaired is preempted by federal law. Appeals will be filed, but the bankruptcy will move forward. Judge...

Detroit Bankruptcy Ruling Imperils Pensions

by Korey Clark This month the federal bankruptcy court judge presiding over Detroit's bankruptcy case, ruled that the city's public pensions were not untouchable, even though they are expressly protected under Michigan's Constitution. "Pension benefits are a contractual right and...

Heard About Detroit? The First Word on Treatment of Public Employee Pension Benefits in Chapter 9 (And Absolutely Not the Last)

by Ben Feder The recent ruling by Judge Stephen Rhodes finding the City of Detroit eligible for protection under Chapter 9 of the U.S. Bankruptcy Code has rightly received considerable attention. The determination that Detroit has met the standards under Section 109(c) of the Bankruptcy Code to be...