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Detroit defeats pensioners’ appeal over bankruptcy cuts

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A divided federal appeals court on Monday rejected claims by Detroit retirees that their pensions were unfairly cut to help the city end the largest U.S. municipal bankruptcy.

The 6th U.S. Circuit Court of Appeals in Cincinnati said restoring the pension cuts would “unavoidably” unravel Detroit’s reorganization plan, which helped the city shed $7 billion of debt and end its 17-month bankruptcy in December 2014.

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“This is not a close call,” Circuit Judge Alice Batchelder wrote for a 2-1 majority.

“The harm to the city and its dependents – employees and stakeholders, agencies and businesses, and 685,000 residents – so outweighs the harm to these appellants that granting their requested relief and unraveling the plan would be impractical, imprudent, and therefore inequitable,” she added.

Thousands of retired Detroit city workers were subjected to 4.5 percent pension cuts, the end of cost-of-living increases, and reduced insurance coverage to help the city close a $1.88 billion pension plan funding gap.

Cuts could have been deeper had Detroit not set up a $816 million fund financed by taxpayers, charities and private donors, in what became known as the “Grand Bargain.”

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Monday’s decision upheld a September 2015 ruling by U.S. District Judge Bernard Friedman in Detroit.

The appeals court, like Friedman, said the retirees’ claims were subject to “equitable mootness,” a legal doctrine intended to prevent some bankruptcy reorganizations from being undone, which could harm those who agreed to them in good faith.

Circuit Judge Karen Nelson Moore dissented. She said the retirees deserve their day in court, and questioned the wisdom of applying equitable mootness to municipal bankruptcies.

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“I fear that using such a justification to brush aside the retirees’ legal claims will leave them with the impression that their rights do not matter,” Moore wrote.

Jamie Fields, a lawyer for many retirees who challenged the pension cuts, said his clients may ask the full appeals court to reconsider the decision.

“Being a split decision, I feel somewhat vindicated,” he said in a phone interview. “I think we were on good legal footing.”

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Lawyers for Detroit did not immediately respond to requests for comment.

(Reporting by Jonathan Stempel in New York; Editing by David Gregorio and Tom Brown)

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… then let us make a small request. Like you, we here at Raw Story believe in the power of progressive journalism — and we’re investing in investigative reporting as other publications give it the ax. Raw Story readers power David Cay Johnston’s DCReport, which we've expanded to keep watch in Washington. We’ve exposed billionaire tax evasion and uncovered White House efforts to poison our water. We’ve revealed financial scams that prey on veterans, and efforts to harm workers exploited by abusive bosses. We’ve launched a weekly podcast, “We’ve Got Issues,” focused on issues, not tweets. Unlike other news sites, we’ve decided to make our original content free. But we need your support to do what we do.

Raw Story is independent. You won’t find mainstream media bias here. We’re not part of a conglomerate, or a project of venture capital bros. From unflinching coverage of racism, to revealing efforts to erode our rights, Raw Story will continue to expose hypocrisy and harm. Unhinged from corporate overlords, we fight to ensure no one is forgotten.

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Trump aides desperately try to downplay ‘order’ to US companies to leave China

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Donald Trump's top aides on Sunday downplayed the idea of US companies being forced to abandon China any time soon, as an edict from the president ordering businesses to start looking for alternatives has been met with skepticism.

Treasury Secretary Steven Mnuchin and White House economics advisor Larry Kudlow took to the airwaves from France, where Trump is participating in the G7 summit, to smooth out tensions in the business community prompted by Trump's Friday tweet.

Trump said he has "no plan now" to bring US companies in line, and his aides quickly reinforced the message.

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President Donald Trump doubled down Sunday on his hard line against China after sowing confusion with statements that he might be willing to soften a trade war G7 partners fear threatens the world economy.

At the G7 summit in Biarritz, France, Trump announced a major trade deal with Japan and promised more of the same with Britain, once Brexit is done.

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"I have second thoughts about everything," he conceded to reporters when asked if he regretted his decision on Friday to ramp up tariffs on all Chinese imports, worth some $550 billion, in retaliation for Beijing's earlier hike of levies on US goods.

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Persecuted Christians eye long-sought freedom in Sudan

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Sudan's Christians suffered decades of persecution under the regime of Islamist general Omar al-Bashir. Now they hope his downfall will give the religious freedom they have long prayed for.

Deep within the maze of dusty alleys that honeycomb Omdurman, Khartoum's sprawling twin city, Yousef Zamgila's church is not visible from the street.

It is hidden in the courtyard of a friend's home and consists of a few iron benches, a pulpit and crosses hastily painted on pillars holding a corrugated roof.

"The previous centre got destroyed because we didn't have the right papers. They always refused... So we use the land of our neighbours," says the Lutheran reverend.

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