Detroit beneficiaries OK pension cuts

July 22, 2014 at 3:54 a.m.

by The Associated Press

In a May 30, 2014 file photo, Detroit emergency manager Kevyn Orr speaks with reporters after addressing the Mackinac Policy Conference on Mackinac Island, Mich. In the little more than a year since Orr made Detroit the largest U.S. city to seek bankruptcy protection, it has experienced a wide range of improvements that will factor into Judge Steven Rhodes' decisions during next month's bankruptcy trial. A major piece of the bankruptcy puzzle could fall into place Monday, July 21, 2014, with the expected release of the results of a vote by creditors, including more than 30,000 retired and current city workers, on whether to accept millions of dollars in cuts.
In a May 30, 2014 file photo, Detroit emergency manager Kevyn Orr speaks with reporters after addressing the Mackinac Policy Conference on Mackinac Island, Mich. In the little more than a year since Orr made Detroit the largest U.S. city to seek bankruptcy protection, it has experienced a wide range of improvements that will factor into Judge Steven Rhodes' decisions during next month's bankruptcy trial. A major piece of the bankruptcy puzzle could fall into place Monday, July 21, 2014, with the expected release of the results of a vote by creditors, including more than 30,000 retired and current city workers, on whether to accept millions of dollars in cuts.

DETROIT -- Workers and retirees approved pension cuts in Detroit's bankruptcy, the city announced Monday, a crucial step to emerging from the largest municipal insolvency in U.S. history.


The city reported results from two months of balloting, which ended July 11. Judge Steven Rhodes still must hold a trial in August to determine whether Detroit's overall bankruptcy plan is fair and feasible to all creditors.

"It's clearly a victory for the city," said Anthony Sabino, a bankruptcy expert who teaches business law at St. John's University in New York. "It will pave the way for a confirmation hearing. Detroit will be able to move forward, not with absolute financial certainty but far more than Detroit has enjoyed in decades."

Ballot approval of the pension changes triggers an $816 million bailout from Michigan, foundations and the Detroit Institute of Arts. The money would prevent the sale of city-owned art and avoid deeper pension cuts. The judge, however, still must agree.

A Section on 07/22/2014

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