Kokomo Tribune; Kokomo, Indiana

Bonus content

December 4, 2013

Judge: Detroit eligible for Chapter 9 bankruptcy

DETROIT (AP) — A judge ruled Tuesday that Detroit is eligible to shed billions of dollars of its long-running debt, including the pensions of thousands of workers and retirees, in a much-anticipated decision that shifts the city's epic bankruptcy case into a new and delicate phase.

Judge Steven Rhodes, who wondered aloud why the bankruptcy had not happened years ago, said pensions can be cut just like any contract because the Michigan Constitution does not offer bulletproof protection for employee benefits. But he signaled a desire for a measured approach and warned city officials that they must be prepared to defend any deep reductions.

"This once proud and prosperous city can't pay its debts. It's insolvent," Rhodes said in announcing that Detroit was formally eligible for the largest public bankruptcy in U.S. history. "At the same time, it also has an opportunity for a fresh start."

The ruling came more than four months after Detroit filed for Chapter 9 protection.

Rhodes agreed with unions and pension funds that the city's emergency manager, Kevyn Orr, did not negotiate in good faith in the weeks ahead of the July filing, a key condition under federal law. But he said the number of creditors — more than 100,000 — and a wide array of competing interests probably made that "impossible."

Detroit "could have and should have filed for bankruptcy long before it did. Perhaps years," the judge said.

The decision set the stage for officials to confront $18 billion in debt with a plan that might pay creditors just pennies on the dollar and is sure to include touchy negotiations over the pensions of about 23,000 retirees and 9,000 workers. Orr says pension funds are short by $3.5 billion.

Rhodes promised that he would not "lightly or casually" sign off on just any cuts.

The city has argued it needs bankruptcy protection for the sake of beleaguered residents who have for years tolerated slow police responses, darkened streetlights and erratic garbage pickup — a concern mentioned by the judge during a nine-day trial that ended Nov. 8.

Text Only | Photo Reprints
Bonus content
  • Teen Pilot-Crash [Duplicate] Family: Indiana teen pilot who crashed in ocean knew risks PLAINFIELD (AP) — Haris Suleman knew that flying around the world carried risks. But like adventurers before him, the 17-year-old pilot from Indiana also believed dreams aren't achieved without taking chances. "Why does any explorer undertake the nec

    July 24, 2014 1 Photo

  • Jamie Kennedy live in Kokomo this weekend Actor and stand-up comedian Jamie Kennedy said he's excited for his first-ever trip to the City of Firsts — a place he has heard only one thing about. He laughed Wednesday night, saying the only thing he's heard about Kokomo is that it's home to a pl

    July 24, 2014

  • Social Security Computer Woes [Duplicate] Social Security's $300M IT project doesn't work WASHINGTON (AP) — After spending nearly $300 million on a new computer system to handle disability claims, the Social Security Administration still can't get it to work. And officials can't say when it will. Six years ago, Social Security embarked on

    July 24, 2014 1 Photo

  • Awarded a Pell Grant? Better double-check WASHINGTON (AP) — Potentially tens of thousands of students awarded a Pell Grant or other need-based federal aid for the coming school year could find it taken away because of a mistake in filling out the form. The mistake primarily stems from an onl

    July 24, 2014

  • Film Review Lucy [Duplicate] Review: 'Lucy' won't stretch your brain capacity So let's start with the enticing premise of Luc Besson's "Lucy," starring Scarlett Johansson: Human beings only use 10 percent of their brain capacity. Imagine what it would be like if we could access all of it? Well, wow. It would be sort of like ..

    July 24, 2014 1 Photo

  • Arizona inmate dies 2 hours after execution began PHOENIX (AP) — A condemned Arizona inmate gasped for more than an hour and a half during his execution Wednesday before he died in an episode sure to add to the scrutiny surrounding the death penalty in the U.S. Arizona Attorney General Tom Horne's o

    July 24, 2014

  • Obama [Duplicate] Obama wants limits on US company mergers abroad LOS ANGELES (AP) — President Barack Obama is tapping into growing misgivings about tax-driven overseas mergers by U.S. corporations, issuing a new call to end the practice quickly and questioning the patriotism and citizenship of those companies. The

    July 24, 2014 1 Photo

  • Court rules prison agency mistreated former Pendleton counselor INDIANAPOLIS (AP) — A federal appeals court has ruled that Indiana's prison agency mistreated a female employee when it shrugged off her complaints about workers having sex on her desk and later fired her for having an affair with an official. The ap

    July 23, 2014

  • Porch Shooting [Duplicate] Porch shooter's lawyer says he feared for his life DETROIT (AP) — A defense lawyer for a Detroit-area man who killed an unarmed woman on his porch says he repeatedly heard poundings — "boom, boom, boom" — outside his home before he opened the door and shot her in the face. Jurors heard opening statem

    July 23, 2014 2 Photos

  • George Harrison Tree-Beetles-6 [Duplicate] [Duplicate] George Harrison memorial tree killed by beetles LOS ANGELES (AP) — A tree planted in Los Angeles to honor former Beatle George Harrison has been killed — by beetles. Councilman Tom LaBonge says the pine grew to more than 12 feet tall before succumbing to a bark beetle infestation. The tree was rem

    July 23, 2014 1 Photo

Latest news
Featured Ads
Only on our website
AP Video
Arizona Prison Chief: Execution Wasn't Botched Calif. Police Investigate Peacock Shooting Death Raw: Protesters, Soldiers Clash in West Bank Police: Doctor Who Shot Gunman 'Saved Lives' 'Modern Family' Star on Gay Athletes Coming Out MN Twins Debut Beer Vending Machine DA: Pa. Doctor Fired Back at Hospital Gunman Raw: Iowa Police Dash Cam Shows Wild Chase Obama Seeks Limits on US Company Mergers Abroad Large Family to Share NJ Lottery Winnings U.S. Flights to Israel Resume After Ban Lifted Official: Air Algerie Flight 'probably Crashed' TSA Administrator on Politics and Flight Bans Raw: National Guard Helps Battle WA Wildfires Raw: Ukraine's Donetsk Residents Flee Senators Push to End Hamas Threat in Cease-Fire A Young Victim's Premonition, Hug Before MH17 Raw: Deadly Storm Hits Virginia Campground Death Penalty Expert: 'This is a Turning Point' Raw: MH17 Victim's Bodies Arrive in Netherlands
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Obituaries
Poll
Kelly Lafferty's video on Tom Miller