DETROIT (AP) — A judge has given Detroit the green light to cut pensions as a way out of the largest municipal bankruptcy in U.S. history, a decision that puts the case in the laps of thousands of retirees who had hoped that the Michigan Constitution would protect them from getting smaller checks in their golden years.
Judge Steven Rhodes said the city is eligible to stay in bankruptcy court and scrub $18 billion in debt, with about half of that amount linked to underfunded pensions and health care obligations. But he also warned officials that they'll need to justify any deep reductions.
The case now turns to crunching numbers and trying to strike deals, although unions are pursuing an appeal.
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