When the City files BK, it does so in Federal court.
If the Federal court over rules the State Law saying that “public employee pensions cannot be diminished or impaired”
Well I guess that’s where the real battle begins.
Interesting times.[/quote]
Employee compensation (including pensions), are priority claims. The only question is how they will determine the limits of the priority claims for a municipal BK, as opposed to limits for a business BK. Bondholders do not have priority claims.
