As the once-proud city of Detroit humbles itself in bankruptcy court, its financial future may hinge on this key question: Is the city obliged to its past? Or can Detroit renege on its promises to thousands of retirees for the sake of its present city services?
The legal question at the heart of Detroit's bankruptcy filing has never definitively been answered by the nation's highest courts. But it could become increasingly important as cities from coast to coast are grappling with shortfalls in pension funds that left unchecked could force cutbacks to police, firefighters and other essential city services.
The federal judge overseeing Detroit's bankruptcy has ruled that city employees could not go to state courts to keep their pensions out of the bankruptcy case. Bankruptcy Judge Steven Rhodes said he would hear the pensioners' arguments in his court.
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