http://www.detroitnews.com/story/opi...ptcy/77528560/

The Detroit News reports the serious discussion of the possible filing for Chapter 9 bankruptcy by DPS. Two questions arise:
* I do not understand how bond markets operate. Some bond holders got less than they were owed in the bankruptcy of Detroit. If DPS goes into bankruptcy, some bond holders will likely be clipped. Will this have the consequence of raising the interest rates that many or all Michigan governmental entities pay when they go into the bond market? Is this a good reason for the state to pay off the indebtedness of DPS?
*Second, Judge Rhodes established the principle that the Michigan constitution does not guarantee pension payments to state and local government employees. I realize they may be further litigation about this point. Suppose DPS does not fully pay its obligations to the retirement fund that supports the pensions of teachers and school employees? Would that influence the pension payments of all retirees in that Michigan retirement system or only retirees who are owed pensions because they worked for DPS?
Thanks.