Detroit Defends Bankruptcy Plan

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After a long and painful year of negotiations, officials for the city of Detroit head to court tomorrow to defend the city's plan to exit bankruptcy.

Detroit has struggled to find a way to pay off the $18 billion it owes to various entities and individuals, including city retirees, who once feared they'd lose up to a third of their pensions.

City leaders are counting on something called the grand bargain: the retirees accept pension cuts, which allowed non-profits to step forward to set up a trust to protect the city's valuable art collection. But others owed money by the city are saying the grand bargain is unfair.

U.S. bankruptcy court judge Steven Rhodes will ultimately decide. In the meantime, the city has begun shutting off water to residents who have fallen behind on paying their bills.


This segment aired on September 1, 2014.


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