The City of Detroit's filing for Chapter 9 bankruptcy protection, the largest municipal bankruptcy filing in U.S. history, and the breaking news that Michigan Circuit Court Judge Rosemarie E. Aquilina has issued an Order directing Governor Rick Snyder to withdraw the petition because the filing violated the state’s constitution, raises serious issues for financially stressed local governments. For more on this development, see the NY Times article.The potential for the Detroit bankruptcy as a test case for municipalities restructuring retirement benefits in bankruptcy court is significant.
On the subject of municipal bankruptcy, the Brooklyn
Law School Library has in its collection When States Go Broke: The Origins, Context, and Solutions for the American States in Fiscal Crisis by Peter Conti-Brown and David Skeel (Call #KF1535.S73 W48
2012). Chapter 3 is entitled Public Pension Pressures in the United States. The book collects insights and analysis from leading academics and
practitioners that discuss the ongoing fiscal crisis among the American states.
No one disagrees with the idea that the states face enormous political and
fiscal challenges. There is, however, little consensus on how to fix the
perennial problems associated with these challenges. The book fills an
important gap in the dialogue by offering an academic analysis of the many
issues broached by these debates. Leading scholars in bankruptcy,
constitutional law, labor law, history, political science, and economics have
individually contributed their assessments of the origins, context, and
potential solutions for the states in crisis. It presents readers - academics,
policy makers, and concerned citizens alike - with the resources to begin and
continue that important, solution-oriented conversation., the largest municipal bankruptcy filing in U.S. history,