Detroit pension boards file lawsuit to stop Chapter 9 bankruptcy filing

Pension boards say bankruptcy filing would slash retirees' pensions, Orr and Snyder responsible


DETROIT – Two Detroit pension boards are suing to stop the city's emergency manager and Gov. Rick Snyder from filing Chapter 9 municipal bankruptcy for Detroit.

The suit, filed by the city's General Retirement System and the Police and Fire Retirement System, challenges Emergency Manager Kevyn Orr's and Snyder's authority to authorize bankruptcy proceedings for the city that would "in any way impair the accrued financial benefits of the Retirement Systems' plan participants and beneficiaries."

The suit is asking the Ingham County Circuit Court to stop bankruptcy and Orr before he slashes pension benefits with his restructuring plan. The pension boards say those benefits are protected by Michigan's constitution.

Read: Retirement Systems file lawsuit to stop Chapter 9

The suit claims Orr and Snyder would be in violation of their oaths of office if they allow bankruptcy and the slashing of benefits to happen.

Read more: Retirees upset by Kevyn Orr's plan to slash benefits

Meanwhile, Orr has been meeting with city creditors for negotiations to see if the city will need to file for bankruptcy.

Story: Detroit reports settlement with some creditors

About the Author: