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Detroit goes on trial for its financial future

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DETROIT (WKZO) -- Detroit may have declared Chapter 9 bankruptcy but it doesn’t become official until a federal bankruptcy judge approves it.

The trial will start Tuesday. Up to 80-witnesses are expected to be called and it could take until mid-October to hear from all of them.

Federal Bankruptcy Judge Steven Rhodes will be asked to accept the Grand Bargain, a pool of donated money that is meant to provide protection for the city’s pensioners and the Detroit Institute of Arts.

There will be creditors who will argue that they shouldn’t be required to accept pennies on the dollar for their debts, when others are getting much more.

The city's plan cuts its retiree healthcare costs by 90-percent, unfunded pensions by 54-percent, and total unsecured debt by 74-percent. Detroit filed bankruptcy in July 2013 with debts of at least 18-billion dollars.

 

 

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