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A Fair Settlement: Let's see, the city government, effectively in collusion with the pensioners, borrowed money from banks (that they were colluding with) in order to finance pensions and operations? Right. So, calculate how much borrowed money has gone to pensions. All that is flushed, gone. Neither pensioners nor bondholder gets squat of that unsecured debt. What's left of unsecured debt? Well, don't treat everybody the same. Neither the bondholders nor pensions have been honest players, so they ALL go to the back of the line. (Well, they still get ahead of the Federal government, in case anything is owed to it...) If, after all other unsecured debtors have been paid, there's anything left, then go ahead, divvy it up equally between bondholders and pensioners.
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