It is tragic that the city of Detroit is filing bankruptcy. What is interesting at this point is that a state court has ordered the governor to withdraw the bankruptcy petition on the grounds that it violates the rights of pension holders.
As I recall, when General Motors went bankrupt, the argument that the priority preference violated the rights of bondholders was dismissed out of hand. The rights of union bosses and employees was considered superior.
The similarity in the two is that the rights of those two have contributed money and retain investments in a company or, as the case may be, a city, are considered inferior to those who are drawing money from that business for city.
This is not the recipe for economic prosperity, but instead, is the sure path to economic ruin, as the sad case of the city of Detroit proves