Detroit's recovery plan dips into pensions to keep city afloat | Crain's Detroit Business:
"Orr's plan will test retirees' contention that Michigan's constitution protects vested pension benefits.
No such shield exists, the state-appointed manager's advisers said Friday when they unveiled his plan to restructure Michigan's largest city, a former auto-manufacturing powerhouse that lost one-quarter of its population since 2000.
Orr has said that if he doesn't get what he wants, Chapter 9 bankruptcy would be a last resort.
Detroit missed a $39.7 million payment on debt issued to bolster its pensions that was due Friday, its first failure to repay bondholders.
The city has about $1.5 billion of such obligations, which Fitch Ratings cut yesterday to D, its lowest credit grade."
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