A federal judge today ruled against Detroit pension beneficiaries who had appealed the city’s final bankruptcy plan of adjustment, the post-bankruptcy blueprint for city finances and operations after it emerged from the nation’s largest-ever municipal insolvency, the Detroit Free Press reported today. U.S. District Judge Bernard Friedman tossed out appeals by city retirees who had asked the federal court to remove pension cuts from the city’s December 2014 bankruptcy settlement with thousands of creditors, deals that helped the city shed $7 billion in debt. The retirees, including members of the Detroit Active and Retired Employee Association (DAREA), had sought full restoration of pension benefits, even though a majority of retirees in the city’s General Retirement System voted to accept the settlement. Detroit’s lawyers asked Judge Friedman to reject the appeals, arguing they were “equitably moot,” a legal doctrine that says a bankruptcy exit plan shouldn’t be reopened once it is substantially consummated, because doing so could hinder the success of the plan and harm other parties who’ve reached settlements.
