Detroit’s Recovery Plan Dips Into Pensions to Keep City Afloat
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Detroit Emergency Manager Kevyn Orr's proposal to cut pension benefits previously thought sacrosanct for 30,000 workers and retirees may tip Detroit into bankruptcy if unions don't play along.
Getting dispassionate bondholders to take partial payment will be easier than wresting retirement cuts from unions, said Ken Schneider, a Detroit bankruptcy lawyer. He said Orr’s June 20 meeting with unions and creditors meant to frame negotiations over $17 billion in debt and obligations may presage the largest U.S. municipal bankruptcy.