What's Next In Detroit Bankruptcy - New York News

What's Next In Detroit Bankruptcy

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by ELIZABETH PRANN
Washington, DC.

Now that the city of Detroit has filed a historic bankruptcy involving more than $18 billion in debts that officials say have been piled up over 60 years, what's next?

The process will be a lengthy one. It will involve more than 100,000 creditors, including the police and fire retirement system, as well as the city's 20,000 general retirees and emergency managers.

Kevyn Orr says all city workers, including current and retired, could see pensions cuts.

"We are going to have a dialogue with pension funds about what we can do. And they are two different funds police and fire and general services and they may have different levels of funding," says Orr, a bankruptcy expert hired by the state.

Reports say pension holders plan to make the argument that the governor cannot impose a Chapter 9 filing that would effect pensions.

Orr has called on a federal bankruptcy judge to appoint a committee to represent the retiree interests.

Any federal resources, however, are already strained. The national debt remains well over $16 trillion and the federal government is struggling under automatic spending cuts.

The mayor says the city has to set a benchmark on how to come back from this tragedy and they're monitoring the federal response.

"Now that we've done our bankruptcy filing, I think we need to take a step back and see what's next. There's a lot of conversations, planning and negotiations that will go into fixing our city," says Mayor David Bing.

The president and members of his team continue to closely monitor the situation in Detroit, but they've given no indication that a bailout is on the agenda.

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