DETROIT, MI (WTVB) - Michigan Governor Rick Snyder praised the decision by Judge Steven Rhodes allowing the City of Detroit to file Chapter 9 Bankruptcy. The Motor City has an $18 billion debt it wants to clear up, and the Bankruptcy ruling will permit them to cut deals that would pay off banks, bondholders and debtors just pennies on the dollar.
Emergency Manager Kevyn Orr says he will issue his proposed solution in January and the bargaining can begin. A separate ruling will also permit the city to slash the pensions and healthcare benefits of retired city employees, but its Orr’s decision, and right now he isn’t offering specifics.
The ruling was immediately appealed by one of the workers unions in Detroit, and other unions. Michigan Attorney General Bill Schutte also applauded the bankruptcy ruling but said he will file an amicus brief, supporting the union that the pensions are protected by state Constitution. It may wind up being decided by the U.S. Supreme Court.