Detroit Pensions Not Protected By Constitution In Bankruptcy

The fallout from the economic collapse in late 2007 continues. The recent filing by the City of Detroit for bankruptcy protection is the largest public sector bankruptcy petition ever filed. Looming in the background was Michigan’s Public Law 436, which granted the City consent to seek bankruptcy protection from pension obligations. At risk were the pensions of every City employee and retiree. Detroit estimated its debt to be $18…

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Bankruptcy Proceedings Allow City To Dissolve Contract With Police Colonel

On March 23, 2010, Joseph Moran retired from his position as Chief of Police of the City of Central Falls, Rhode Island, and began collecting retirement benefits under a pension plan maintained by the City. The next day, the City entered into a contract appointing Moran as “Colonel” of the Police Department for a five-year term. The contract provided for compensation and benefits that exceeded those of other non-union…

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