Detroit Bankruptcy Puts Pensions on the Chopping Block

The Takeaway

Detroit pensions may now be on the chopping block.
Money that was supposed to materialize disappeared into thin air–in the lead up to Detroit’s filing for bankruptcy last week, a big hole was revealed in the city’s pension fund. Kevyn Orr, the city’s emergency manager, found $3.5 billion in liabilities in the pension budget.
Prior to that discovery, the fund was believed to be in relative financial health, the one point of financial stability in the city’s otherwise crumbling financial situation.
Now, the city will plead its case before a federal bankruptcy court. Orr has said that pensioners and bond owners will have to expect less money than they are legally owed.
Peter Henning, Wayne State University Professor of Law, explains.
Stay up to date with The Takeaway–become a Facebook fan & follow us on Twitter!

Do you support journalism that strengthens our democracy?

At The World, we believe strongly that human-centered journalism is at the heart of an informed public and a strong democracy. We see democracy and journalism as two sides of the same coin. If you care about one, it is imperative to care about the other.

Every day, our nonprofit newsroom seeks to inform and empower listeners and hold the powerful accountable. Neither would be possible without the support of listeners like you. If you believe in our work, will you give today? We need your help now more than ever!