NEW YORK TIMES: Detroit is eligible to shed billions in debt in the largest public bankruptcy ever in the United States, a federal judge ruled Tuesday, while also finding that the public pensions could be reduced during reorganization despite a provision in Michigan’s Constitution.
In ruling that Detroit was eligible to reorganize under federal bankruptcy law, Judge Steven W. Rhodes said the city met every test of insolvency, including failing to pay its debts and being unable to provide a minimum level of basic services to its 680,000 residents…
Under the ruling, the vastly diminished city, once the nation’s fourth largest and the cradle of the American auto industry, will be allowed to search for a way to pay off some portion of its debts and to restore essential services to tolerable levels under court supervision. The goal, according to Kevyn Orr, an emergency manager appointed by the state of Michigan, is to emerge from court protection next year with a formal plan for starting over… (more)
EDITOR Bankruptcy should have taken place with the Harrisburg debt.
Instead craven politicians led by Gov. Tom Corbett conived to protect bond holders and a callous egotist caused the Lancaster County Bulk Waste Management Authority to pay twice the value of a long troubld and enivornmental hazardous incinerator. By doing so, they pushed the total cost of past follies onto the Harrisburg and Lancaster County publics.
This all took place while the County Commissioners and the Lancaster Newspapers, Inc. paid little heed.
Incidentally, the holder of much of the Detroit debt is the same as holds most of the Harrisburg debt.
