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Motor City Engine Begins to Rev as Bankruptcy Ends

On Dec. 10, Michigan Gov. Rick Snyder (R) announced that beleaguered Detroit is emerging from bankruptcy. This came two days after Detroit Emergency Manager Kevyn Orr issued his final order.

Orr’s final order affirms the changes that have been made and agreed to regarding Detroit’s pension plan. The Combined Plan for the Police and Fire Retirement System of the City of Detroit went into effect on July 1, 2014. 

Orr has recommended the city’s receivership be terminated, and has announced that with the improvement of the city’s fortunes, he is resigning from his post. 

Snyder, in a news release, hailed the changes in Detroit’s finances: “Our state’s largest city has moved through this historic bankruptcy to move toward a brighter future.” In his letter accepting Orr’s determination, Snyder thanked him for his service, “which has been extraordinary and transformative for the city of Detroit and our state as a whole.”

As the city’s economy and finances improve, the way is paved for city retirement benefits to grow again. The final order contains rules for how the benefits reduced under the plan may be restored during the 30 years after the Bankruptcy Court’s ruling in In Re. City of Detroit, Michigan (Case No. 13-53846).