From New York Times: “Detroit Ruling on Bankruptcy Lifts Pension Protections”
“Experts said the decision seemed unlikely to prompt a rush of bankruptcy filings by cities, but was likely to give cities more leverage over pensions in negotiations before bankruptcies. ”
The governor and Harrisburg’s creditors, and even the benighted board of the Lancaster County Bulk Waste Management Authority knew or should have known that, if the federal court allowed Detroit to enter bankruptcy procedures, the negotiating position of the Harrisburg creditors would have been significantly weakened.
Thus the cost of a settlement would have been borne by the bond holder / guarantoras likely will be the case in Detroit, to a lesser extent pensioners, but for sure: not the citizenry.
Moreover, the Lancaster County Bulk Waste Management Authority could have bid for the incinerator in bankruptcy court and likely purchased it at a third to a half of the cost they are currently paying. And they may have been able to get the federal court to hold them harmless from any future toxic waste remedial requirements on the existing incinerator ash accumulated over decades on the site.
