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Detroit files for Chapter 9 bankruptcy [UPDATED: Detroit is Eligible]

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posted on Aug, 12 2013 @ 10:24 AM
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reply to post by DontTreadOnMe
 



As to the Mayoral Election, Mike Duggan probably has a better shot, even though he is White. He comes from the Ed Mcnamara group of Wayne County Democrats who gave us Kwame Kilpatrick. Just based off him being associated with Ed McNamara, I don't think he is the right person at the right moment. If he wins, it's more of the same when it comes to Detroit Politics. Detroit needs and deserves a Leader who can get things done, without screwing the Citizens of Detroit in the long run.




posted on Aug, 12 2013 @ 11:58 AM
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reply to post by pavil
 


Yeah, I don't hold out too much hope for him or Napoleon.
One a part of the McNamara machine....the other an ex-cop with dubious leadership skills.

Even if a panel is put in place by the state to oversee Detroit longterm....as they did in NYC....Lansing could remove that with the stroke of a pen were Michigan to put its Detroit-blinders back on.



posted on Aug, 15 2013 @ 05:38 PM
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The pension funds are gearing up to contest Mr Orr's number's and alleged cuts to the pensions of Detroit retirees.

Detroit's two public pension funds will file an objection on Monday to the city's bankruptcy filing on Michigan constitutional grounds, a representative of the pension boards said on Thursday.
~~~~~
For Detroit's Chapter 9 bankruptcy to proceed U.S. Bankruptcy Judge Steven Rhodes, who is overseeing the case, must first find the city has proved it is insolvent and negotiated in good faith with its creditors, or that there were too many creditors to make negotiation feasible.

townhall.com...

And a local article about the same issues.
www.detroitnews.com...

An opinion as to whether pension funds have delusonal expectations.
qz.com...

The value of a state pension is both the benefits paid to retirees, but the certainty that those benefits will be paid. When the workers retire they expect a fraction of their final salary, increasing with inflation, will be paid to them every year until they die. They will get that money no matter what happens to the stock market or how long they live. That kind of certainty is very valuable. It is why we pay for insurance, to ensure in all states of the world (even a house fire, sudden death of a loved one) you’ll have protection. The state governments have promised to pay out pensions no matter what happens. The problem is they don’t account for the cost of that guarantee.



posted on Aug, 16 2013 @ 12:10 PM
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Judge to mediate collective bargaining talks



Lansing— U.S. Bankruptcy Judge Steven Rhodes on Friday directed a federal judge to mediate negotiations between the city of Detroit and its labor unions over collective bargaining agreements.

In a court order filed Friday, Rhodes also tasked Gerald Rosen, chief judge of the U.S. District Court for the Eastern District of Michigan, with mediating claims the various classes of creditors have against Detroit in its bankruptcy case.

Rosen filed a separate court order on Friday scheduling a Sept. 17 closed-door mediation session in his courtroom with representatives of bondholders, banks, labor unions, the city’s pension funds, Detroit Emergency Manager Kevyn Orr and Michigan Attorney General Bill Schuette.

From The Detroit News: www.detroitnews.com...


Well, looks like Sept 17 will be a big day for the city's retirees and union workers.

Hopefully, the unions will not be allowed to have a place on the retiree committee..as retirees have no union representation...and once you leave employment the union has no interest in retiree welfare.
Hopefully, Orr's pensions numbers will finally be shown the light of day so they may be questioned against the Pension Funds own numbers.



posted on Aug, 16 2013 @ 01:16 PM
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reply to post by DontTreadOnMe
 


The thing that really gets me, besides the horrible mismanagement of Detroit, is that now, when it is plainly obvious that City really doesn't have money, all the creditors are acting like they are going to get 100 cents on the dollar. That plainly isn't going to happen without State or Federal intervention and that doesn't look likely. I feel bad for everyone, but everyone is going to have to take a hit for the decades long mismanagement of Detroit. Nobody is going to come out a winner.



posted on Aug, 16 2013 @ 05:49 PM
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reply to post by pavil
 


Well, that's not quite true.
Lawyers, accountants and consultants of various stripes will come out like bandits.....

Everyone may need to deal with this, but those who will feel the hurt the most should be cut the least: pensioners.
They have no way to recoup their losses....and they are not risk takers....as most investors were....and truthfully, they were duped insofar as those they trusted acted rashly with their fund: letting Detroit borrow it :shk:



posted on Aug, 16 2013 @ 07:53 PM
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reply to post by DontTreadOnMe
 

I agree with that, they should be the ones to suffer the least. To be honest, if the Pensions were managed properly, they shouldn't have to take any cuts. I have always thought pensions were designed in and of themselves to be self funding and self sufficient, at least in a perfect world. I was under the impression Pension funds were separated from City Budgets. Not my area of expertise though.

There are some crazy pensions in Municipalities though, especially for those "leaders". They need to feel the pain more than the average Joe and Jane City Worker.

Where the City really blew it, was the retiree health care promises they made.



posted on Aug, 16 2013 @ 08:03 PM
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reply to post by pavil
 


ya pensions,,,sigh,,

"At 19, Pierre-Luc Dusseault became Canada’s youngest ever MP this week when he was elected as a member of the New Democratic Party in the riding of Sherbrooke.

Now, in addition to his $157,731 annual salary, he’ll qualify for a pension of nearly $30,000 a year if he remains in Parliament for just six years."

www.thespec.com...
edit on 16-8-2013 by BobAthome because: (no reason given)



posted on Aug, 16 2013 @ 09:39 PM
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reply to post by BobAthome
 


Don't get me started on legislative pensions...or piggy back pensions. GRRRRR!
##########


reply to post by pavil
 


The funds ARE separate.
1. Detroit "conned" the pensions funds into loaning them money....backed by bonds of dubious validity....and without knowledge to pensioners....Detroit now doesn't want to pay them back. Some pension fund board members were less than scrupulous and at least one is under indictment.
2. Detroit has a history of not making payments to the pension funds..in fact Detroit was taken to court to get the monies due the funds.
3. Orr has stopped all city payments to the funds...saying the money is better spent elsewhere. This is increasing the money owed the funds.

That is where most of the shortfall is occurring.



posted on Aug, 17 2013 @ 07:56 AM
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How bad is Detroit's pension situation? Depends who you ask



So which firm is correct? Both are reputable actuarial firms. Orr’s critics say that he, Gov. Rick Snyder and state Treasurer Andy Dillon want to make the funds look bad, that they’re hoping to smooth the path for a takeover of the funds’ governance.

Orr and his financial team say that the Milliman numbers are responsible, conservative estimates, and that the pension fund mismanagement and the city’s inability to make its required contributions are simply one of the deep financial problems he was brought here to fix.

Finding the truth will be one of the bankruptcy court’s biggest tasks in the coming months.

www.freep.com...

Sounds to me like the state and Orr are picking the most dire situation.....for whatever reson and don't care if the retirees are thrust into poverty.
We can only hope the State Constitution will stand.

further reading:
www.freep.com...

related
Petition drive calls for Detroit EM Orr to step down
Judge schedules Sept. 17 mediation session for Detroit bargaining talk



posted on Aug, 20 2013 @ 05:06 PM
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reply to post by DontTreadOnMe
 


this might help,,

" Local Business Executive Pleads Guilty to Conspiracy to Defraud the United States "


www.fbi.gov... mediate&

Its a start,,



posted on Aug, 20 2013 @ 05:30 PM
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reply to post by BobAthome
 


Yeah, he forfeits $2 million in assets....every little bit helps....and you gotta wonder how many others like him are out there

and not just in Detroit.....
edit on Tue Aug 20 2013 by DontTreadOnMe because: clarity

edit on Thu Aug 22 2013 by DontTreadOnMe because: bb code



posted on Aug, 22 2013 @ 01:10 PM
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The latest installments


New retiree committee will grapple with pension underfunding dispute

“There may have to be a third analysis, another actuarial analysis,” said Brian O’Keefe of Lippitt O’Keefe, the Birmingham law firm that is general counsel for the city’s two retirement associations. These associations speak for the city’s 23,500retirees.
~~~
Committee members will have the fiduciary responsibility to negotiate with Orr’s team on any changes to health care, pensions or other benefits encompassed in the overall restructuring plan that Orr hopes to propose by the end of the year. The committee would make recommendations on any plan that changed retiree benefits but it would be voted on by the retirees themselves — not the committee.

It's really good to see that the pensioners finally have a voice.....and that Orr cannot just be allowed to put livelihoods on the chopping block....

Detroit could make some financial database info public after judge questions secrecy

After U.S. Bankruptcy Judge Steven Rhodes challenged the secrecy of a city database containing information about Detroit’s financial future, the city agreed Wednesday to consider making some documents publicly available while still shielding others containing retirees’ personal information.

During a surprise spat in court with the city’s attorneys, Rhodes called into question the decision to require creditors to sign a confidentiality agreement to access a digital database, called a data room, containing about 70,000 pages of city documents.


Here we have the City filing for bankruptcy, wanting creditors and pensioners to give Detroit a pass on it's dubious financial pass....but they want to keep secrets from those whose relief they see


I'm glad to see that Judge Rhodes is not letting the wool get pulled over his eyes....and I wish his continued watchfulness in the coming months....

Q&A: Will Detroit bankruptcy judge approve 'swaps' settlement?

Several creditors today will try to persuade U.S. Bankruptcy Judge Steven Rhodes not to approve the first proposed settlement in Detroit’s Chapter 9 bankruptcy.
~~~~
Syncora, which insured the swaps and the pension debt, is the main opponent. Syncora said it has a contractual right to approve the settlement and that it would suffer “massive” financial losses if the swaps are canceled. Several others, including insurers and retiree associations, also have objected for various reasons.


All sources are the Detroit Free Press.
edit on Thu Aug 22 2013 by DontTreadOnMe because: (no reason given)



posted on Aug, 29 2013 @ 08:39 PM
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Mediator to meet Thursday with city, creditors on Detroit bankruptcy dispute


In an effort to keep Detroit’s bankruptcy from getting mired in protracted and expensive litigation, U.S. Bankruptcy Judge Steven Rhodes has promoted the use of mediation to settle disputes over $18.5 billion in city debt and the city’s limited to resources to pay its bills and long-term obligations.

“This is all the rage in bankruptcy these days — they’re trying to get more stuff resolved outside of the courtroom,” said John Pottow, a bankruptcy law professor at the University of Michigan.

From The Detroit News: www.detroitnews.com...

For me, this is a good move.
It allows the parties to deal with issues privately at first...with the media skewing everything.
#####
Retired city workers hire 2 law firms for Detroit bankruptcy case


Orr has not proposed specific cuts for pensions, but he wants to lump the unfunded liability in with $11.5 billion in unsecured debts and pay those creditors a $2 billion settlement — about 17 cents for each dollar owed.

From The Detroit News: www.detroitnews.com...

Well, this may be some good news.
All along, the media has presented the case that Orr wants to cut the pensioners and give them 10-cents on the dollar.
Here is seems he want to give them 17-cents on the dollar....and that would be on the [alleged] billions he says the Funds are underfunded.
Of course, another big chunk of that $11.5 billion is unfunded medical costs...and I am totally at a loss as to how a City could NOT fund its health insurance.
######
Orr: Mismanagement must be 'overwhelming' for pension takeover


Emergency Manager Kevyn Orr said Wednesday he would need “overwhelming” evidence of alleged waste and investment mismanagement within city pension funds before he would consider taking control of a retirement system worth more than $5 billion.

Orr is awaiting final results of a joint investigation by the city’s auditor and inspector generals and an analysis of the retirement system’s financial health before deciding whether he should oust pension fund members — an option available to him under Michigan’s emergency manager law.

From The Detroit News: www.detroitnews.com...

Have I mentioned lately how much I just don't trust this guy



edit on Thu Aug 29 2013 by DontTreadOnMe because: (no reason given)



posted on Sep, 6 2013 @ 12:16 PM
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This is how messed up Detroit's Antiquated Tax Department is:

Woman Who Let Detroit Keep Her Tax Refund Rewarded With $5,300 Bill From The City


Article



posted on Sep, 6 2013 @ 04:03 PM
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Originally posted by DontTreadOnMe
......
Have I mentioned lately how much I just don't trust this guy




I trust him (Orr) more than I trust any officials in Detroit.

They have been sucking at the teat of Detroit Taxpayers so long, their mouths have totally attached. There are no civil servants in Detroit, only oppoutunists who look to first and foremost benefit themsevles and their fellow suckling cronies. Tell me one City or even County official there you would trust with ALL of your financial matters.

I am sure the numbers the pension boards are presenting are very skewed as well. You think they are going to say "Hey, we really screwed up and mis-managed things" ?

Detroit needs to get ALL of it's dirty laundry out in the public, regardless of the scandals that it will bring. Otherwise, this will repeat itself again......

It's still happening BTW,.... Detroit pension fund debtor gets $5M contract from city Article


Detroit— The city approved up to $5 million worth of contracts this week for firms linked with a media company tied to a bribery scandal involving ex-Mayor Kwame Kilpatrick, his fraternity brother and the city’s pension funds, The Detroit News has learned.
The firms are connected to newspaper publisher Hiram Jackson and received the contracts even though his company, Real Times Media, was involved in a deal in which a city pension fund allegedly lost $13.3 million — a deal included in a bribery and kickback case pending in federal court.



Report: Detroit pension funds misspent

Article


Detroit— Pension trustees weakened the city’s retirement fund by using hundreds of millions of dollars on savings plans for active workers and doling out annual bonus checks, according to a restructuring expert hired by the city.
The practice — in effect since at least the mid-1980s — was “effectively robbing” the city’s pension funds and contributed to a “significant underfunding” of the city’s pension funds, according to a report from restructuring firm Conway MacKenzie.

The report — written by Charles Moore, a consultant with Conway MacKenzie — said the General pension fund distributed more than $532 million in annuity savings plan payments in the last five years, an income stream for workers that flowed during good and bad years.

In 2009, for instance, when the pension fund lost 24 percent of its value, workers earned 7.5 percent on their savings plans — a payout the consultant called “egregious” and “an abuse of discretion.”



edit on 6-9-2013 by pavil because: (no reason given)



posted on Sep, 6 2013 @ 05:32 PM
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reply to post by pavil
 

You beat me to it....especially that second article that showed the city gave monies to active employees....rather than pump the money back into the pension fund for a rainy day.

Rather than cut pensions....put the pension funds into a safe place....away from the crookedness of Detroit.

And....another perspective....how artwork is perceived as more important than human life and livliehood.
deadlinede troit.com

The debate about city-owned art raises questions about civic values and what kind of city Detroit should be. Why have so many people rallied to support the art and not the people threatened with a devastating loss to their livelihoods?

That disparity reflects the tone-deafness among many people that accompanied Detroit’s long slide into fiscal anarchy. For years, the increasingly beleaguered and shrinking city struggled for survival, surrounded by a generally prosperous and growing region that purred with self-satisfaction and mostly ignored Detroit’s plight. In some quarters, people even attacked the city and its residents for being so needy.

The outpouring of support for the DIA reinforces the idea -- shared by a good number of metro residents -- that Detroit is some amusement park whose treasures are there to be used for people’s pleasure with little regard for the city’s residents and their concerns.



posted on Sep, 7 2013 @ 05:22 PM
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reply to post by DontTreadOnMe
 


Yeah, that is pretty messed up priorities. It pretty much comes down to this: The City of Detroit seems to hate the Suburbs and the Suburbs of Detroit feel likewise about the City. Every time and "outsider" tries to help the City, they get accused by the PTB in Detroit of raping the City. It's happened so many times like this, that people in the suburbs have lost interest in the City and it's plight. It's not like the future of the Suburbs depends on Detroit anymore. The Future of Detroit depends on the Suburbs and the State of Michigan now.

There are thousands of suburban residents who never even go into the City of Detroit, and Tens of Thousands that only go for sporting events ect. People always say that South East Michigan needs Detroit, but to be honest, we really don't. Life has gone on for 30 to 40 years here without the City Proper of Detroit being a vital part of the community that is South East Michigan. That's probably where the disconnect happens.

The Detroit Institute of Arts has never impressed me with it's catalog. It's nice, but nothing to write home about, compared to all the others I have seen in the U.S. and especially Europe. It's sounds as if a good chunk of it's catalog is not out for public view. Hell, they have the original Howdy Doody puppet in storage, give it to the Smithsonian. I can't name one work of art there other than the Diego Rivera Murals.



posted on Sep, 7 2013 @ 08:23 PM
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reply to post by pavil
 


Yes, definitely no love lost between the City and its suburbs. The divide has been going on for decades.
Sadly, it won't get any better is the suburbs are socked for the Water Department. Rates are already high.....Detroit has a high ratio of unpaid bills likely absorbed by the 'burbs.
Gotta wonder if the bus system will also be an additional burden for the SEMTA.
I could go on.

Detroit's heyday ended in about 1955. It's been downhill ever since. The downtown area just cannot compete with any major city I'm aware of...look at Atlanta, Chicago, Boston.
It's Art Institute.... is okay....and, yeah...the Diego Rivera murals are outstanding. I also remember a pretty nice Egyptian exhibit...and the circular staircase. It's certainly been maintained better than the Main Library across the street....a building sadly in need of a face-lift...and I cannot imagine the inside is much better...despite some cosmetics recently...and the scandal surrounding that....
I cannot imagine how the City allowed all those FANTASTIC downtown buildings, all that GREAT architecture to go into ruins ...it just makes me sick.

The Zoo is nice, but I've never been to another to compare.
Belle Isle used to be nice.
The Detroit Symphony is still good...and there are major sports teams.
Basically, Detroit seems rather provincial....and they have let themselves go and surrounded themselves in scandal after scandal after scandal....
The Historical Museum...
....call Jay Leno or the Smithsonian and see if they want any of the cars...Detroit doesn't need them.



posted on Sep, 8 2013 @ 07:58 AM
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Why did Detroit declare bankruptcy?



Well, here's a USA Today Opinion.....and having lived in the area for many years, I have to agree with his opinion.....Detroit would be in much better shape had it not elected convicted felon Kwame Kilpatrick...I doubt it would be in bankruptcy now.....the housecleaning it needed never happened and instead, he was elected to a second term in 2005
www.usatoday.com...


en.wikipedia.org...



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