Judge Steven Rhodes, who wondered aloud why the bankruptcy had not happened years ago, said pensions can be altered just like any contract because the Michigan Constitution does not offer bulletproof protection for employee benefits.
But he signaled a desire for a measured approach and warned city officials that they must be prepared to defend any deep reductions.
‘This once proud and prosperous city can’t pay its debts. It’s insolvent,’ Rhodes said in formally granting Detroit the largest public bankruptcy in U.S. history. ‘It the same time, it also has an opportunity for a fresh start.’
The ruling came more than four months after Detroit filed for Chapter 9 protection.