Detroit Files for BankruptcyJuly 18, 2013 – In The News
Michael Sweet was quoted in the CNN Money article "Detroit Files for Bankruptcy." While the full text can be found in the July 18, 2013, issue of CNN Money, a synopsis is noted below.
In a move that could slash pensions to city workers and retirees, and leave bondholders with pennies on the dollar, the city of Detroit filed for bankruptcy. The bankruptcy was filed by the city’s emergency manager Kevyn Orr and approved by the governor, which could make it the first major municipal bankruptcy to result in cuts to retiree benefits according to Michael Sweet.
“It’s relatively easy to blow off a creditor,” Sweet said. “It’s much harder when it’s people who are the fabric of your community. You need a police force, you need a fire department. You’re saying [to them] you’re not worth what you were previously promised.”
Sweet noted that case law on whether pensions can be cut in such a manner is quite limited, which could lead to a long court battle. “It’s a big enough question, that (the Supreme Court) is where it likely will have to go,” Sweet said.