Illinois Court Strikes Down Chicago Pension Reforms, Deepening City’s Financial Crisis

Via Cadwalader.com,

By The Associated Press, Cadwalader.com,

July 29, 2015,

On July 24, 2015, Judge Rita M. Novak of the Circuit Court of Cook County, Illinois struck down recently enacted legislation designed to shore up two of the City of Chicago’s severely underfunded pension plans by, among other things, reducing benefits.1  Judge Novak viewed as controlling a decision by the Illinois Supreme Court from May of this year which held that similar legislation reducing benefits for members of state-funded pension plans violated the “pension protection clause” of the Illinois constitution.  (See Cadwalader’s memo on the Supreme Court’s decision here).  Unlike the State of Illinois, however, which was left with few options after its own pension reform legislation was struck down in May, Chicago has the potential to access chapter 9 of the United States Bankruptcy Code as a means of achieving pension reform.

Read the full article.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s