Detroit won’t be quite ready to exit bankruptcy until next month, city lawyers told Judge Steven Rhodes at a hearing Monday.
Judge Rhodes has already approved the city’s bankruptcy restructuring plan. But the city must still complete a couple steps before it officially leaves Chapter 9.
It needs to make sure its two-year budget reflects the plan’s terms, and release details of the plan to financial markets.
The case must wrap up by the end of the year for a key settlement to take effect: the “grand bargain” to minimize pension cuts, and protect the Detroit Institute of Arts.
Pension fund lawyers also told Judge Rhodes that Detroit retirees pushed toward poverty by pension cuts should be able to apply for aid by next week.
Even though the grand bargain spared most retirees deep direct pension cuts, many still face a significant loss of income.
That’s why the city and state are putting together a $55 million “income stabilization fund.”
Pensioners can apply for help if they’re pushed below 130% of the federal poverty level. They must do so by the end of the year.
Pension fund lawyers said retirees should look for information in the mail, and can find out more at town hall meetings next month.
Pension cuts are slated to take effect March 1.