[quote=CA renter][quote=The-Shoveler]It’s very simple really,
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.[/quote]
Priority claim is what is at stake in Detroit. I know in CA that Pensioner are a priority claim. That being said I hope your right.
Why?
Simply because when you stiff your bondholders no one will lend you money. When no one will lend you money… You have to learn to live within your means. That means work will be outsourced to companies that are far more effiencent in getting the task complete then a goverment backed union employee.
And… No more can kicking local goverments that are beholden to the political will of union backed voters.
