[Zakeet]

Detroit Eligible To File Chapter 9; Pension Haircuts Allowed Bankruptcy Judge Rules

Update, and it's official:

• JUDGE: DETROIT ELIGIBLE FOR IMMEDIATE BANKRUPTCY PROTECTION
  
• DETROIT TO REMAIN UNDER BANKRUPTCY COURT PROTECTION, JUDGE SAYS

As somewhat expected - though hoped against by many Detroit union workers - Judge Steven Rhodes appears to have confirmed Detroit is eligible for bankruptcy protection (after pointing out that the city's accounting was accurate and it is indeed insolvent) making this the largest ever muni bankruptcy.

• JUDGE RHODES SAYS HE WILL ALLOW PENSION CUTS IN DETROIT'S BANKRUPTCY
• DETROIT JUDGE: NOTHING SEPARATES PENSIONS FROM OTHER DEBT

The city will now begin working toward its next major move - the submission of a plan to re-adjust its more than $18 billion in debt - including significant haircuts for pension funds (possibly 16c on the dollar recovery) and bondholders. With Detroit as precedent, we can only imagine the torrent of other cities in trouble that will be willing to fold.

[aimhigh]

I'm now reading Domestic Enemies: The Reconquista by Bracken, where he describes an economy where all pensioners are now impoverished. Spooky to see it happen.

Liberal judges are OK with this because they know that pensioners don't pay into union coffers. Liberal judges are OK with shifting money from pensioners back to government workers who contribute to Democrats.

[TomasUSMC]

I can hear the Union saying....WTF, WE ARE PRINTING 3 BILLION A DAY AND YOU CAN’T PAY OUR MUDAFKN PENSIONS!!!!!

A HUGE PANDORA’S BOX HAS BEEN OPENED UP. CAMPAIGN ISSUE FO SURE.

[gogeo]

That's not complete, and therefore misleading.

The pension haircuts are on the unfunded portion of the pensions.

So...if a pension was 85% funded, the "haircut" would only apply to the 15% not fully funded.