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Detroit Retirees Put on Notice in Bankruptcy Ruling

Detroit, once the symbol of U.S. manufacturing muscle, was given the authority to try to pare billions in debt and slash employee pensions in a federal court ruling that may have implications for distressed cities across the U.S.

U.S. Bankruptcy Judge Steven Rhodes, in a decision announced today in Detroit, ruled that the city had properly sought bankruptcy protection on July 18, the largest ever for a municipality, rejecting arguments by unions that pension cuts are barred by Michigan’s constitution.