Detroit: Bankruptcy proposal to leave pensioners with 16 cents on the dollar
The proposal would affect 21,000 retirees, including police officers, firefighters, and other municipal workers
DETROIT — It was the politicians, and not longtime city workers like Olivia Gillon, who brought Detroit to the brink of insolvency, but now Gillon can only watch as lawyers negotiating the Motor City’s bankruptcy bid place a new value on her hard-earned pension: 16 cents on the dollar.
The beleaguered city, facing debt of as much as $20 billion and led by a state-appointed manager, tried nearly a year ago to renegotiate with creditors. When those talks broke down, the city filed for bankruptcy last July, but the filing was ruled unconstitutional by a judge. A series of state and federal rulings followed, culminating in a trial that began last week in which the city must show it is eligible to enter bankruptcy. That’s when the frightening magnitude of the “haircut” being sought for some 21,000 retirees emerged.
“It’s wrong on every possible level,” Gillon, 68, told FoxNews.com. “I earned my pension. I retired expecting it and I feel that I should have it.”