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A judge has approved Detroit’s plan to get out of bankruptcy by cutting pensions, erasing billions of dollars of debt and promising nearly $2 billion in better services for a city desperate for a turnaround.
Detroit’s exit from the largest public filing in U.S. history took less than 16 months, lightning-fast by bankruptcy standards. The success is largely due to a series of deals between the city and major creditors, especially general retirees who agreed to accept smaller pension checks.
Judge Steven Rhodes found the overall plan is fair and feasible, a key threshold in bankruptcy law. He announced his decision Friday.
No significant critics were left at the end of trial last week. Bond insurers with more than $1 billion at stake settled for much less.
Law professor and bankruptcy expert John Pottow of the University of Michigan Law School joins Here & Now’s Sacha Pfeiffer to discuss the judge’s ruling, the bankruptcy plan and the challenges that lie ahead for Detroit.