Residents and Retired City Workers Make a Plea to the U.S. Bankruptcy Court to Block Detroit’s Bid for Bankruptcy Protection

Bankruptcy is not instituted solely for individuals and businesses.  As Northern Californians know too well, there are circumstances in which cities may also file for bankruptcy.  In July 2013, Detroit filed its petition for bankruptcy—the largest municipal bankruptcy in U.S. history.

When a city files for bankruptcy, the adverse effects on its citizens are sometimes over-looked due to the grand scale of the proceeding.

Last week, the Honorable Judge Steven Rhodes of the U.S. Bankruptcy Court for the Eastern District of Michigan granted an informal hearing to Detroit residents and retirees to express their concerns regarding the city’s efforts to reduce its debt amounting in more than $18 billion.

Nearly one hundred individuals took part in the process that lasted many hours.  A portion of those heard served Detroit and neighboring areas for decades, and in all capacities.  These people now risk seeing their already-strained pension benefits reduced further.  Others showed concern for the risk presented by cuts to police and fire personnel, especially in a city that is struggling with crime rates as it is.

Detroit’s eligibility for bankruptcy protection will be determined next month, and now Detroit’s citizens hope that the human-factor undertones of municipal bankruptcy will, at the very least, be in the back of decision-makers’ minds.

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