Detroit Bankruptcy Ruling: Implications for Public Pension Plans
LAPF Investments, December 1, 2013
Thomas A. Dubbs
Once the prosperous center of America's automobile industry and the birthplace of Motown music, Detroit now has a new title – the largest bankrupt city in U.S. history. It is also the largest U.S. municipal bankruptcy by debt, estimated at over $18 billion, including $3.5 billion in unfunded pension liabilities to the city's two largest unsecured creditors – its two pension plans. These plans represent over 32,000 active and retired city employees whose pensions are now directly at risk in Detroit's unfolding bankruptcy.
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