Rhodes OKs Bankruptcy, Allows Pension Cuts


Photo from Instagram user @kathleenmariedet

U.S. Bankruptcy Judge Steven Rhodes ruled Tuesday morning that Detroit is in fact eligible for Chapter 9 bankruptcy and that city retirees' pensions can legally be cut.

Speaking for roughly 90 minutes, Rhodes confirmed Detroit was insolvent for a long time, saying "Detroit could have and should have filed bankruptcy long before it did

perhaps years before" according to a live blog at WXYZ. At the same time he "scolded" the city for rushing through negotiations, which he deemed not in good faith, according to the Free Press. Negotiations between city and creditors gave creditors only 30 days to offer a counter, which Rhodes ruled failed to meet the requirements of attempting to negotiate outside of court. He also said that in some out of court meetings between the city and creditors the city had "told creditors that the meetings were not negotiations."

As to what specifically the city will do to try and pay off the over $18 billion debt, Rhodes was unclear. Addressing plans of selling the Detroit Institute of Art's collection, he warned a "one time infusion of cash by selling an asset [

] only delays the inevitable financial failure," according to WXYZ, and emphasized instead restructuring how the city spends its money.

In a press conference following the address, Emergency Financial Manager Kevyn Orr said Rhodes' ruling did not surprise him. When asked if pensions will be cut and if so by how much, Orr said such details were under wraps. Paraphrasing Rhodes, Orr said "there's not been a restructuring where contracts have not been adjusted."

About The Author

Lee DeVito

Leyland "Lee" DeVito grew up in the suburbs of Detroit, where he read Metro Times religiously due to teenaged-induced boredom. He became a contributing writer for Metro Times in 2009, and Editor in Chief in 2016. In addition to writing, he also supplies occasional illustrations. His writing has been published...
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