Federal Judge Approves Detroit Bankruptcy, Angers City Retirees
Matt | On 04, Dec 2013
The city of Detroit is going through some rough times these days. The actions of a federal bankruptcy judge only serve to underscore that.
On Tuesday, Judge Steven Rhodes ruled that the city can move forward with its bankruptcy. Now the fear is that Detroit won’t have to pay pensions to its retirees, and other money owed to investors, employees, and creditors, according to CNN Money.
Retirees who depend on pensions for survival are pissed, to say the least. There have been protests in downtown Detroit. People are wondering how they will replace income after already retiring from the job market. (If you haven’t noticed, older people aren’t always in demand for the best jobs).
It is truly a scary situation if you think about it. Imagine working for 30 years, retiring with the promise of a healthy pension only to have that money ripped away from you during your golden years. People need money to live on in retirement. Many former city workers will find themselves scrambling to make ends meet if the bankruptcy cuts pensions too hard — which the city may have to do in order to achieve financial solvency.
It is unclear just how much of Detroit’s over $11 billion in unsecured debt could be on the table.
Detroit filed for bankruptcy on July 18, making it the largest municipal filing in history. Earlier in the year, Kevyn Orr was appointed the city’s emergency manager at the request of Michigan’s Gov. Rick Snyder, a Republican. Orr’s job is to pull the city out of bankruptcy with several actionable steps, including this summer’s filing. He will remain in office until sometime in 2014. At that time, Mayor-elect Mike Duggan will take over as the chief executive of the city.
For now, Detroiters are bracing to see what they outcome of the bankruptcy will be. How hard will city retirees, debt holders, and others be hit in the wallets? When will the city begin providing some level of livable services to the residents that remain in the Motor City? The eyes of the world will be on Detroit as they slowly begin to receive answers to these questions.