Bankruptcy Court

  • Pension cuts taking effect

    This week Detroit city retirees begin to see reductions in pension benefits — cuts enacted as part of Detroit’s exit from bankruptcy. Most retirees will see a 4.5 percent cut to their monthly pension payments. WDET’s Quinn Klinefelter has this report.

  • The Rhodes Replacement: Meet Thomas Tucker

    Judge Thomas J. Tucker will now preside over Detroit’s bankruptcy case, following Judge Steven Rhodes’s retirement, effective today.

    Tucker is a graduate of Harvard law school and the University of Toledo. He’s been a federal bankruptcy judge in Detroit for 12 years. Before that, he practiced law for two decades with the Toledo firm Cooper & Walinski.

    Rhodes handled all of the major decisions in the case but Tucker is scheduled to hold a March 19 hearing on some disputed claims against the Detroit Water and Sewerage Department.

    Here is Chief Judge for the Sixth Circuit Court of Appeals R. Guy Cole, Jr.’s order appointing Tucker:

    2.17.15 Thomas Tucker Appointment

    By in Bankruptcy Court
  • Judge Rhodes retires

    Bankruptcy Judge Steven Rhodes is retiring, effective Wednesday.

    His measured tone, punctual arrival and pointed questions for attorneys became hallmarks of Detroit’s bankruptcy proceedings. During the 17-month case, he read more than 9,200 filings and issued hundreds of orders.

    Rhodes spent 30 years on the federal bench, some of those as the chief bankruptcy judge on an appellate level panel.

    The law wasn’t his first or only interest. He has a degree in mechanical engineering and he plays guitar in a band.

    The chief judge for the United States Court of Appeals for the Sixth Circuit will designate Rhodes’s successor to preside over the Detroit case.

     

    By in Bankruptcy Court
  • Judge: $178 million reasonable bankruptcy tab for Detroit

    Bankruptcy Judge Steven Rhodes today agreed that the nearly $178 million the city of Detroit paid its attorneys, financial analysts and other consultants was a reasonable charge. In a 48-page opinion released today, Rhodes wrote the city had met its requirement to show “all amounts to be paid by the debtor or by any person for services or expenses in the case or incident to the plan have been fully disclosed and are reasonable.”

    Among the fees charged:

    • Jones Day law firm, representing the city, $57.9 million
    • Miller Buckfire, an investment banking firm, $22.8 million
    • Ernst & Young, financial analysts, $20.2 million
    • Conway MacKenzie, restructuring experts, $17.3 million

    The city also paid about $26 million in expenses for the Official Committee of Retirees, which represented pensioners. The Committee’s law firm, Denton’s, billed $15.4 million.

    In his opinion, Rhodes noted the state of Michigan picked up about $5.3 million of the city’s total legal costs, making the total bill about $183.2 million. He also wrote that seven of the professional firms paid by the city filed briefs that supported the reasonableness of fees. Just one individual filed an objection to them.

    As he did when he approved the city’s Plan of Adjustment, Rhodes in his decision on the fees again praised the attorneys and other professionals, crediting their work in the case:

    It is perhaps too easy now to fast-forward through the play-back that is necessary to comprehend the magnitude of the accomplishments of the professionals in this case. But now is the time to appreciate and credit that accomplishment and all of the effort and skill of those professionals in achieving it. The City is now on a path to success precisely because of the expertise, skill, commitment, endurance, personal sacrifice, civility and proficiency of all of the professionals in the case, including most certainly those whose fees are subject to review in this opinion.

    2.12.15 Fees Decision

    By in Bankruptcy Court, Pensions, WDET
  • Orr: “The sky’s the limit” for Detroit post-bankruptcy

    Former Detroit emergency manager Kevyn Orr was back in town Tuesday for an “exit interview” before the Detroit Economic Club. Michigan Radio’s Sarah Cwiek reports that Orr reiterated that municipal bankruptcy was the only real option for Detroit, but insisted both he and the city got through the process relatively unscathed. Michigan Radio is a Detroit Journalism Cooperative partner.