Contractual obligations go out of the window in Federal Bankruptcy Court. GM had contractual obligations to bondholders which evaporated 5 years ago in bankruptcy court.
When all is said and done, it would appear that the bankruptcy will proceed but with the pensions kept off-limits, much as a student loan not being dischargable. Naturally, the pensions are at the root of the bankruptcy so it will be a circle jerk of the first order of magnitude.
Yes, I believe that is part of the point of filing for bankruptcy.
The only thing they could argue is that GM’s shareholders didn’t have a line in the MI Constitution saying their pensions couldn’t be reduced/impaired.
Still I’d like to see how they get blood from stones though. If you’re broke, I don’t know how you pay the pension obligations.