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Detroit bankruptcy tests state pension protections

Is the city obliged to its past? Or can Detroit renege on its promises to thousands of retirees for the sake of its present city services?

By David A. Lieb | Updated on August 01, 2013
Vera Proctor, center, a retiree from the Detroit Police Department, listens to a news conference of union leaders in Detroit. (AP Photo/Paul Sancya)

As the once-proud city of Detroit humbles itself in bankruptcy court, its financial future may hinge on this key question: Is the city obliged to its past? Or can Detroit renege on its promises to thousands of retirees for the sake of its present city services?

The legal question at the heart of Detroit’s bankruptcy filing has never definitively been answered by the nation’s highest courts. But it could become increasingly important as cities from coast to coast are grappling with shortfalls in pension funds that left unchecked could force cutbacks to police, firefighters and other essential city services.

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