“I see a beautiful city and a brilliant people rising from this abyss.” –  Charles Dickens, Tale of Two Cities Traveling through suburban Detroit, a sprawling city of 143 square miles whose population has dropped from nearly two million to less than 700,000, you can often imagine you are in rural Tennessee. Rutted narrow roads...

CalPERS, the large California public pension plan, has filed an amicus brief in the case of Detroit’s bankruptcy. Calpers does not like the Detroit pension plans being treated like unsecured creditors in a bankruptcy proceeding, and cites the constitutional (state constitutional, that is) protections for pensions. Thing is, there’s law, and there’s reality. But let’s...

A huge battle between pensioners and bondholders is on. Last week, a Bond rating agency blasted Governor Rick Snyder’s $350-million Detroit pension rescue plan as being too favorable to creditors at the expense of bondholders. Today, the New York Times reports Detroit Turns Bankruptcy Into Challenge of Banks. Amy Laskey,a managing director at Fitch Ratings, said in a recent report...

Detroit’s emergency manager Kevyn Orr says a pension fund takeover is a “right, if not an obligation” after Orr learned of extra, unwarranted pension payments. Please consider Emergency Manager Weighs Pension-Fund Takeover. Kevyn Orr said in a recent interview that at the current pace, the city’s General Services System pension fund could lose its ability to...

“Not surprisingly, within moments of news of Detroit’s bankruptcy, pension scare mongers took to their pedestals to place all the blame on pensions. California, Los Angeles, and other governments would surely follow Detroit’s footsteps in short order, they cried. It’s simply not true, like most of the claims made by the anti-pension soldiers who have...

As hoped and expected Detroit Bankruptcy Protections Affirmed, Snyder Shielded.  Detroit can enjoy the protections of bankruptcy, including immunity from lawsuits related to the case, a federal judge ruled, extending that shield to Michigan Governor Rick Snyder. U.S. Bankruptcy Judge Steeven Rhodes in Detroit today blocked lawsuits by public employee groups and pension funds who alleged...

In an inevitable, anticlimactic decision today, Detroit files for bankruptcy.  Detroit became the largest US city to ever file for bankruptcy on Thursday, seeking protection from its creditors as it restructures more than $18bn in debt. Richard Snyder, Michigan’s Republican governor, said in a letter included in the filing. “Detroit simply cannot raise enough revenue to...