A federal judge has given Detroit the go
ahead to proceed with the city’s bankruptcy this past Wednesday, meaning
billions of dollars owed investors, city employees, and creditors will not be
paid. A restructuring plan is supposed to be presented by March 1st,
and it’s unknown whether pension cuts will be included in the plan.
Unions and protestors have made the argument
that the city should not be able to cut pension in order to reduce the debt.
They argued that negotiations with creditors were not made in good faith.
U.S. Bankruptcy Judge Steven Rhodes ruled
that pension cuts will be fair game to be included into the restructuring plan
but made sure he stated that does not necessarily mean that he will approve the
cuts.
Detroit Emergency Manager Kevyn Orr said he
will continue to negotiate with as many creditors as possible.
Many retirees and workers of the city of
Detroit are bracing for benefit cuts.