Pensions

  • On WDET: A Detroit pensioner describes life in the bankruptcy case

    Steve Wojtowicz worked for the Detroit Water and Sewerage Department for 31 years. It was his first job out of high school. He filed an objection to the city’s Plan of Adjustment, and Bankruptcy Judge Steven Rhodes selected him to testify today. His main objection to the city’s plan is the proposal to have some pensioners pay back money they received in their annuity savings funds, especially the nearly  7 percent interest the city wants to assign to those repayments.

    Wojtowicz talked about his objections in advance of his testimony with Next Chapter Detroit’s Sandra Svoboda.

    Here’s audio of that interview, with a full transcript below:

    Sandra Svoboda: For a while there were court happenings, a lot of things behind the scene but really earlier this year was when things became very specific for the pensioners, can you tell me about when you really started understanding specifically what this case was going to mean to your pension.

    Steve Wojtowicz: I understood obviously health care was the first thing and second was the reduction in my pension. I assumed that they could not touch my annuity. That was my thinking. Until toward the middle of the year when basically we did get the notice in the mail that they were going to try to take back some of the excess interest paid out in the annuity, the annuity that we put our own money into, they’re going to take that excess interest out. They thought we were overpaid. I could live with it. It was the $89,000 interest that they’re going to take back in a recoupment but when I got the voting papers in the mail, it said it was going to be $600 a month, and I divided the 600 into 89,000 and I said I’ll be paying this off in 12 years and it’s supposed to be for my lifetime. I’m 55 years old so I’m assuming my life expectancy would be 80 years old. So the $600 I’d end up paying back $180,000, $200,000 over this 25 years. I called the lawyers actually that same day and they explained to me they’re adding in 6.75 percent interest on top of the recoupment amount from the annuity. They said to me that they did not have no idea that the 6.75 percent was added on to the annuity. So.

    SS: And you took some other kind of official action then, right?

    SW: I started contacting the lawyers and going to the meetings and that’s one thing I requested that and actually in my objection when I applied that I put objections in that they should allow for a lump sum payback on the annuity because I didn’t think that the 6.75 percent interest rate was fair. I mean I can go out and get a home equity loan or some other way to pay this money back and I’ll be able to pay it back it’s not going to be my lifetime. It’s a better financial choice.

    SS: So you filing that objection in the case with the court led to you appearing to testify now.

    SW: Yes. I was actually surprised about that too. I just thought I would put the objection in and that would be the end of it and I would never hear anything about it. It’s good to hear the lump sum did go through and I will speak in front of the honorable Judge Rhodes. I’m still objecting to the 6.75 percent. It affects me a lot but it’s going to affect other people a lot more than me. I have the opportunity to do a home equity loan. A lot of the people don’t. They really don’t

    SS: What do you expect the outcome will be of the 80 of you that are scheduled to testify?

    SW: I don’t know. I don’t think much to be honest with you. He’ doing what he’s supposed to do and here are objections but I don’t think much is going to come of it. It’s a closed door. I still want to say something to him. That this is really, it’s not fair. You’re picking on a small amount of people.

  • Bankruptcy Judge hears from pensioners, employees

    It’s a day of anger, emotion and personal stories in bankruptcy court. Judge Steven Rhodes invited 80 people to testify from among the roughly 600 objections, saying they represented a cross sample of the complaints.

    Of the 36 invited to the morning session, 16 showed up, and the judge allowed one who wasn’t on the list to speak. The judge listened from the bench, thanking each person for their testimony but not asking questions or offering comments, with a few exceptions.

    Here’s a sample of some of the individuals who appeared and what they had to say:

    City retiree Jo Ann Cooper, 70, has lived on Detroit eastside for 40 years. In court she said, “There’s a lot of decay in that area, there’s a lot of blight. … I have never wanted to leave Detroit. … I should not have to at this time in my life worry about this.  .. We earned out compensation we worked for it and it should not be taken away from us.”

    Judge Rhodes complimented retired police officer Jamie Fields, saying “I have found the paperwork you submitted particularly articulated and well researched.” Fields argued that the judge would need to apply a “best-interest test,” in weighing whether the Plan of Adjustment would be approved at the August confirmation hearings. “The city has an obligation to show that retirees would receive better treatment under the plan than they would receive outside the plan,” Fields said.

    Pensioner Fiorenzo Fabris called for the federal government to contribute more toward the city’s debts. “They were able to assist the American automakers, why can’t they pay to help restore our pensions? … I think if Detroit recovers, and I hope I does, the pensioners should receive something for their forced compensation.”

    Jesse J. Florence Sr. drove a bus for the Detroit Department of Transportation for 36 years. “I can recall many days that I went to work even though I might not have felt like it because I knew I had a pension and would be compensated when I retired. … I never thought I would be struggling to get health care. … This is devastating.“

    Gerald Galazka objected that police and fire retirees were suffering fewer cuts than the general service pensioners. “This plan placed undue hardship on general retirees,” he said. Galazka also urged better oversight in the future of the city’s finances. “The city and the trustees of the pension funds have fiduciary responsibility to make sure pension funds are properly managed and funded. “There needs to be a mechanism that audits the financial condition of public pension to make sure they are financially sound and do not engage in risky investments that put retiree funds in jeopardy.”

    City retiree Deborah Graham said she would like to be recognized as a “working-class citizen” who “provided an economic backbone to the city,” and she raised the issue that the bankruptcy results in age discrimination against city retirees. “I hope that you restore our benefits,” she told the judge.

    City employee Andrea Hackett said she objects to the plan because it violates state and federal constitutional guarantees of due process and pensions. She told the judge the bankruptcy amounted to a “corporate hostile takeover of the Detroit” and she had harsh words for Gov. Rick Snyder. “I object to the plan because the governor has breached the oath when he swore to uphold the state constitution. … He appointed the EM against the will of the people.” Like other objectors, Hackett also said the appeal of the bankruptcy should be decided before judge holds the confirmation hearing on the city’s Plan of Adjustment.

    Calling the bankruptcy a “looting frenzy,” by lawyers and financial consultants, Kristen Hamel used her testimony to protest the water shutoffs that have taken place when residential accounts went unpaid. She called the bankruptcy and the water shutoffs part of the “inhuman austerity agenda of Gov. Rick Snyder and Emergency Kevyn Orr,” and reminded the judge “The buck stops with you in these bankruptcy proceedings.” She received applause.

  • Freep: Early returns showing “yes” vote from pensioners on bankruptcy ballots

    Relying on results tabulated a few days before the deadline, sources told the Detroit Free Press newspaper that the city’s pensioners appear to have voted in favor of the city’s bankruptcy restructuring plan that calls for cuts to their pension payments.

    Freep reporter Nathan Bomey and Matt Helms write:

    Police and fire pensioners appeared to have accepted the deal by a wide margin, and while the vote was closer with civilian retirees, only an unexpected last-minute surge of “no” votes would derail the plan, according to people familiar with the voting results.

    Still, many ballots were mailed in the final days of the two-month voting period. Those votes, due to a California company by 5 p.m. Friday, could change the result. The city will report the final results to the bankruptcy court on or before Monday, July 21.

    A favorable vote from pensioners mean the “grand bargain” funding would become available to the city’s two pension funds. If the pensioners vote in favor of the plan — which calls for 4.5 percent cuts to non-uniform retires and lower cost-of-living increases for the police and fire pensioners, among other terms – then $195 million of state money, $366 million from private foundations and $100 million the Detroit Institute of Arts would raise is contributed to the pension funds.

    Other terms include pensioners waiving their rights to litigate certain issues related to bankruptcy.

     

  • Bankruptcy balloting deadline reached

    Today was the deadline for Detroit retirees to vote on the city’s bankruptcy restructuring plan, known formally as a “plan of adjustment.” The California firm tallying the votes had to receive them by today. All creditors get to vote on the plan of adjustment. But pensioners’ votes are particularly key—especially when it comes to the future of the “grand bargain.” Michigan Radio’s Sarah Cwiek explains why.

  • Another Syncora setback

    Detroit’s casino tax revenue will remain protected from creditors during the bankruptcy process, a federal judge ruled today.

    U.S. District Judge Bernard Friedman’s order denies a request from a Bermuda-based company that insured some controversial pension debt that was backed by the gaming money. His ruling also complies with an order from the Sixth Circuit Court of Appeals, which said last week that Friedman had to rule by Monday on Syncora’s request.

    The issue involves a part of the city’s complicated loan deal to fund pensions. As part of the 2009 financing arrangement, the city deposited payments on pension debt into one account while the casino tax revenue went into a separate, third-party, custodial “lockbox” account. When the city’s debt payment was received by creditors, the casino taxes were released back to the city.

    But the city stopped making the debt payments more than a year ago and Syncora, prior to the city’s bankruptcy, had asked a federal court to force the city to release the roughly $15 million it collected monthly from the casinos and make debt payments. The casino monies are the third largest source of city revenue, behind income and property taxes.

    After the city filed for Chapter 9, the dispute moved to bankruptcy court. In August, bankruptcy Judge Steven Rhodes ruled that the “lockbox” arrangement kept the casino taxes as a collateral agreement with the financial institutions and the money was not part of the city’s assets. Therefore, his ruling meant, the casino taxes were protected from being paid to creditors during the bankruptcy case.

    Syncora appealed Rhodes’s ruling to Friedman, who stayed the issue until last week’s appellate court order that forced today’s ruling:

    7.11.14 Friedman’s Order

  • On MiWeek: The DIA art appraisal and the bankruptcy vote

    • A new report on the value of the Detroit Institute of Arts collection was released just days before creditors and retirees’ votes are to be counted, but will the new appraisal have any impact on the bankruptcy vote? The MiWeek team weighs in on this DPTV program. Here’s a link to a preview of the segment, which airs at 7:30 p.m. Thursday
  • The Artvest Report on the DIA: A history, appraisal of key issues

    As a backdrop to the news today about an analysis showing the Detroit Institute of Arts collection is valued at up to $4.6 billion, a figure that could fall to $1.1 billion in actual sales if the art was put on the market, NextChapterDetroit.com  brings you a bit of history about why and how the museum’s collection has been part of the bankruptcy case this year.

    1-The artwork at the Detroit Institute of Arts is the city’s top asset, according to Detroit’s Disclosure Statement, the document designed to provide information to creditors so they can evaluate the city’s restructuring plans. The artwork, while not precisely valued in the May 5 document, was worth more than city-owned land, Belle Isle and the Detroit-Windsor Tunnel.

    2-Prior to Emergency Manager Kevyn Orr filing for bankruptcy, Michigan Attorney General Bill Schuette issued an opinion that the artwork was protected from sale and “is held by the City of Detroit in charitable trust for the people of Michigan, and no piece in the collection may thus be sold, conveyed, or transferred to satisfy City debts or obligations.” His opinion has no force of law in federal bankruptcy court.

    3-Bond insurer Syncora, who stands to lose nearly $300 million in the case, is one of the creditors that has been advocating for selling art to cover debts. Here’s what Syncora attorney Stephen Hackney said at an April hearing:

    “The art has been a sort of noteworthy, highly publicized part of the case, and from our standpoint, a very important part of the case … The city is proposing to address the issues surrounding the art collection in a way, from our standpoint, that yields far less value.”

    4-Bankruptcy Judge Steven Rhodes on April 28 granted Syncora’s request to view communication between Schuette and the DIA that preceded his opinion that the art was protected from sale to pay debt. In issuing his ruling from the bench, Rhodes said:

    Plainly, the extent to which the art held by the Detroit Institute of Arts should be taken into account in evaluating whether the city’s plan meets the best-interest test of the bankruptcy code is a substantial issue in the case, one that has not been prejudged or determined by the court at all, and, of course, this ruling should not be construed to suggest one way or another how the court will or may rule on that substantive issue of confirmation.

    5-In preparation for trial, the city and the DIA hired Artvest Partners, an art investment firm, to “assess the viability and practicality of selling art or otherwise monetizing the collection,” according to Bill Nowling, spokesperson for Detroit emergency manager Kevyn Orr.

    6-The Artvest report disputes some of the findings in another report that was commissioned by some of the city’s creditors.

    7-Issued today, the Artvest report cost $112,500. (Its author, Michael Plummer, co-founder of the Artvest firm and a former employee at both Christie’s and Sotheby’s, is scheduled to appear as an expert witness during the city’s bankruptcy trial in August.)

    8-The report was issued just days after pensioners and other creditors  needed to mail their ballots to meet the Friday deadline of the votes being received. Would this information have changed their minds? We’ll never know. As a related noted: The DIA has pledged to raise $100 million toward pension funding as part of the “grand bargain,” the agreement that also has, among other terms, the state paying $195 million and foundations contributing $366 million toward the pension funds.

    Among the Artvest report’s findings:

    About two-thirds of the DIA’s collection is in four areas that have “fallen out of favor with collectors and that are underperforming their market peak in 2007”. The are: American Art pre-1950, Old Maser and 19th Century European Paintings, and Impressionist and Modern Art.

    If the DIA collection were for sale, “few sales would be to other museums, both because other museums are likely to boycott such sales, as well as because funding constraints limit their participation in the marketplace at today’s price levels.”

    If the DIA wanted its art auctioned, Sotheby’s and Christie’s might not participate. Sotheby’s parent company was based in Detroit from 1983 to 2006, and had a number of connections to the DIA. Christie’s “received unusually strong negative feedback from both the museum community and the art industry by merely conducting an appraisal.”

    If the city sold art through an auction house outside of Christie’s or Sotheby’s, it could expect to lose 20-40 percent of potential selling prices.

    Another issue raised in the report is the authenticity of some of the pieces. The DIA has works that are thought to be Modiglianis but have not been validated by the art worlds’ most trusted sources. And also, according to the report, the authenticity of some of the Old Masters paintings could be challenged during a review of them before a sale.

    The iconic Diego Rivera murals would have little value if moved. According to the Artvest report, cutting them off the walls would seriously damage them.

    A sale of the art, especially if ordered through a court decision related to settling debt, could result in “formidable legal obstacles and prolonged litigation.” Some of those obstacles, according to the report, are: items would need free and clear title to be sold, and the threat of future litigation could prevent that; it’s likely the Michigan Attorney General would take legal steps to prevent the sale, based on his opinion from last year; the heirs of DIA donors would be likely to “pursue every legal option necessary to stop or delay the sale of any of the art, potentially leading to years of litigation.”

    The potential impact of selling the most valuable works would “deprive the museum of its core attraction, drastically reduce attendance and related revenues, drive away potential donors of future gifts and endowments, and in all likelihood, ultimately for the closure of the DIA due to a loss of economic sustainability, resulting in a full liquidation.”

    -By WDET’s Sandra Svoboda

    @WDETSandra and nextchapter@wdet.org

    7.9.14 Artvest Report

  • DIA Analysis: Collection valued in the billions but would sell for less than half that

    photo (15)A New York art investment firm estimates the Detroit Institute of Arts collection is worth billions of dollars. But, the firm says, if the art was sold to pay creditors in the bankruptcy, it would likely only bring in half that amount.

    The company, Artvest Partners produced a 112-page report for Detroit Emergency Manager Kevyn Orr analyzing the financial value of the D-I-A’s collection as well as issues and dynamics involved in selling it. The city and the museum hired the firm.

    NextChapterDetroit.com has a longer analysis of some of the history and findings of the report.

    Several creditors and some pensioners have argued the city should monetize the collection to pay part of its $18 billion dollars in debt. They likely won’t be happy this report came out just days after they needed to return their ballots voting on the city’s Plan of Adjustment, the blueprint for restructuring debt, which does not include selling anything from the DIA. The Plan does include the “grand bargain” funding: that’s the state’s $195 million and the private foundation contributions of $366 million to fund pensions. The agreement also comes with a $100 million commitment from the DIA toward pension funding.

    The Artvest report estimates total worth of the museum’s 60,000 pieces is between $2.8 billion and $4.6 billion dollars with the individual pieces ranging in value from tens of millions to a few thousand dollars.

    The Artvest analysis also finds selling the collection would produce between $1.1 billion and $1.8 billion in revenues. The report identifies several challenges in today’s market. For example, a majority of the DIA’s collection is comprised of styles that have fallen out of favor with collectors and investors.

    “This is the first comprehensive valuation of the entire DIA collection. The report makes it abundantly clear that selling art to settle debt will not generate the kind of revenue the City’s creditors claim it will,” says Bill Nowling, Orr’s spokesman.

    Still, creditors likely won’t give up the fight to have the city sell art to pay debt.

    The report was authored by Michael Plummer, co-founder of the Artvest firm and a former employee at both Christie’s and Sotheby’s. He is scheduled to appear as an expert witness during the city’s bankruptcy trial in August.

    -By WDET’s Sandra Svoboda

    @WDETSandra and nextchapter@wdet.org

    Featured art above by Carl Oxley III.

     

  • City, Police union reach parts of an agreement

    The city and the Detroit Police Officers Association, the union representing patrol officers, say they have reached an agreement on some terms of what could become a five-year contract, the federal court bankruptcy mediators announced tonight. The deal includes wages, health care benefits and pensions, and union leaders now say they support the city’s Plan of Adjustment and urge a “yes” vote.

    Of course ballots from the DPOA’s roughly 1,900 members are due in California by Friday, so unless there is a mass expedited mailing, leadership’s promotion of a favorable vote may not matter much to the election results.

    Under the current terms of the Plan of Adjustment, the city’s “blueprint” of how it will restructure debt and services post-bankruptcy, retired police have no cuts to their pensions, take a reduced cost-of-living increase and assume more of their health care costs. But those provisions only happen with a favorable vote on the plan from the two classes of pensioners: the non-uniform (or general service) employees and police and fire fighters.

    Without favorable votes, cuts to pensions and other benefits are much steeper.

    The DPOA was one of the few employee groups that had not reached an agreement through mediation with the city. Its attorneys had been highly critical of the city in court filings, and DPOA is one of the parties appealing Judge Steven Rhodes ruling that the city was eligible to file for bankruptcy. Last week, the Sixth Circuit Court of Appeals in Cincinnati scheduled arguments on that appeal for July 30.

    If pensioners vote in favor of the plan, they agree to drop the litigation.

    The city’s bankruptcy trial is set to begin Aug. 14.

    Mediators Statement 07082014

  • Appellate panel orders action in Detroit courts

    Bond insurer Syncora hasn’t had many courtroom victories in Detroit’s bankruptcy case as its attorneys fight for the hundreds of millions of dollars the Bermuda-based company stands to lose. But last week the Sixth Circuit Court of Appeals ordered a lower court to not delay any longer and decide within days an issue Syncora raised before the city filed for bankruptcy nearly a year ago.

    Syncora argues the city should use casino tax revenue to pay creditors instead of being allowed to keep it for operations, as has been ruled in earlier decisions in the Chapter 9 case. The roughly $170 million collected annually from three casinos is the third largest source of revenue for Detroit, behind income and property taxes, so it’s a significant part of the city’s balance sheet.

    Whether the Appellate Court order turns into a type of “win” for Syncora or not, the 13-page ruling, issued at Syncora’s request, contains several noteworthy admonishments from the appellate court to the lower courts in Detroit. For example,

    “Without a final decision on that question, the city will not know what amount its coffers will contribute to the bankruptcy estate, the creditors cannot know the size of the pie they are being asked to share, and the bankruptcy court cannot be confident that it is considering a legally and financially viable plan. An orderly bankruptcy process depends on a concomitantly efficient appeals process, and the district court’s stay of Syncora’s appeal improperly thwarts both processes.”

    And:

    “Insofar as a debtor’s plan of adjustment incorporates final decision reached by the bankruptcy court, any appeals from those decisions should generally be reviewed before the bankruptcy court confirms the plan,” the panel wrote. “The question presented in Syncora’s appeal — whether a substantial revenue stream is rightly considered property of the bankruptcy estate — is precisely the type of issue that should be reviewed before the bankruptcy court confirms the plan of adjustment.”

    Court observers have noticed some other interesting phrases and perhaps innuendos in the ruling that relate to the case’s ambitious timetable, which has been supported and promoted by local and state political leaders. One interpretation is that perhaps this order serves as an indication the Cincinnati-based Sixth Circuit is willing to flex its power in reviewing — and possibly overturning — what’s happening in the Detroit courts.

    While that may prove to be a stretch, the appellate panel clearly took issue with how the Detroit courts have handled this particular issue involving the casino tax revenue. Until the Sixth Circuit’s ruling last week, it could have remained undecided at the city’s bankruptcy trial where Judge Steven Rhodes will rule on the city’s Plan of Adjustment and how it restructures debt and future revenues for operations and services for residents.

    The appellate panel found such a potential delay in deciding the question about the casino tax funds “presents the specter that Syncora may be forced to abandon its appeal and instead to seek appellate review of the bankruptcy court’s decision in the form of an emergency motion for a stay on the confirmation plan. In a bankruptcy case of such scope and complexity, that is not the proper way to adjudicate appeals that implicate legal questions of fundamental importance to the bankruptcy proceedings.”

    The History

    The issue in Syncora’s appeal dates back to 2005, when Detroit borrowed $1.4 billion to fund pensions. In doing so, two nonprofit service corporations were set up as pass throughs for the money because the deal pushed the city’s debt above the state-allowed limit. The debt was issued through what’s called “Certificates of Participation,” (COPs) which the service corporations sold. The proceeds went to the city and then to the two pension funds: one for police and fire, another for general service workers. The city periodically gave the service corporations money to cover the debt payments for the COPs. Some of the debt was at a fixed interest rate, some had a floating rate.

    The city eventually sought to convert the floating interest rate to fixed in the deal that’s known as the “interest rate swaps.” The appellate court wrote, “Because of the city’s dire finances, however, investors were unwilling to buy the certificates and banks were unwilling to execute the interest-rate swaps unless an insurer guaranteed the city’s obligations. Syncora, a monoline insurer, enhanced the city’s creditworthiness by insuring some of the city’s obligations under both the certificates and the swaps.”

    Then in 2009, a credit downgrade and rising interest rates meant the city owed  $300 million under the terms of the deal. To avoid the payment or termination of the agreement, the city and the swap counterparties, including Syncora, made an arrangement involving casino tax revenue, which is the issue involved in the appeal: The city and the swap counterparties bypassed the service corporations by creating two accounts at U.S. Bank.

    The casino taxes would be paid directly into one of the accounts (about $15 million a month), and the city would make payments to the second account under the terms of the interest rate swaps deal (about $4 million a month). U.S. Bank would release the funds from the second account on a quarterly basis to the swap counterparties and from the first account to the city if all obligations were met.

    In June 2013, Syncora, as one of the counterparties with obligations of about $276 million in the deal, notified U.S. Bank there was “an event of default” and asked the bank not to release casino tax revenue to the city. The city sued in Wayne County Circuit Court to force the release of the funds, but Syncora moved the case to U.S. District Court. The issue became part of the bankruptcy case in July 2013, and the funds were frozen while the Chapter 9 case proceeded.

    In August 2013, Judge Rhodes ruled that the casino tax revenue were city property and therefore protected by the bankruptcy filing from payment at that time. Syncora appealed Judge Rhodes’s decision in U.S. District Court, and the case was assigned to Judge Friedman. He received briefs from both parties in the case, but as the appellate court wrote, “…the district court never adjudicated the appeal, and it has languished in that court for seven months.”

    In December, Judge Rhodes ruled the city was eligible for bankruptcy, a decision that was appealed by several parties including Syncora. In February the Sixth Circuit said it would consider the eligibility appeals, and last week scheduled arguments for July 30. Meanwhile, the city reached an agreement to pay $85 million of the $285 million owed on the swaps deal and keep the casino tax revenue instead of paying it to banks. (The city, under Emergency Manager’s Kevyn Orr’ direction, is suing the service corporations, challenging the legality of their existence.)

    In April the district court stayed Syncora’s appeal of the bankruptcy eligibility determination, and a month later Syncora filed the writ of mandamus asking the appellate court to order Judge Friedman to decide on the issue of whether the casino tax should be part of the city’s assets in the bankruptcy case and counted among available funds to pay creditors.

    The Appellate Decision

    The Sixth Circuit Court of Appeals last week ordered Judge Friedman to decide by July 14 on Syncora’s request for release of the funds. A three-judge panel (including Raymond Kethledge, a University of Michigan Law School grad) granted Syncora’s writ of mandamus – that’s a party’s request to a higher court to force a lower court to make a decision, in case you don’t remember that lesson from the landmark Marbury v. Madison case in civics class.

    Such a ruling isn’t common. Of the 10 cases found in the Sixth Circuit online database since the beginning of 2013, just two were granted.

    The appellate panel justified its ruling for two reasons. One was “to protect this court’s future appellate jurisdiction and to ensure that the district court’s stay order does not deprive Syncora of a meaningful opportunity to obtain timely review of the bankruptcy court’s decision.” The other was because the “deprivation of meaningful and timely appellate review itself constitute substantial and irreparable prejudice … and we undertake no inquiry at this point as to whether or not the bankruptcy court correctly decided the underlying dispute.”

    The Sixth Circuit panel went on to say that one of Judge Friedman’s reasons for staying Syncora’s appeal — that if a Sixth Circuit decision related to eligibility “rendered moot” any decision of the bankruptcy court — was “no reason to say other appeals that present independent questions of law.” In other words: deciding whether the casino tax revenue is part of the city’s assets for the bankruptcy case should not be postponed until a separate appeal on the bankruptcy’s eligibility is adjudicated.

    In the simplest of terms: Do your job when it should be done.

    In its ruling on Syncora’s writ of mandamus, the Sixth Circuit did recognize the prospect that it might ultimately uphold all the lower and bankruptcy court decisions. Still, the panel wrote, Whether a substantial revenue stream is rightly considered property of the bankruptcy estate, is precisely the type of issue that should be reviewed before the bankruptcy court confirms the plan of adjustment,” the appellate court said. “The problem posed by the district court’s stay is that it fails to account for all of the potential implications of that court’s inaction.”

    With the trial scheduled to begin Aug. 14, that timetable is getting tight.

    -By WDET’s Sandra Svoboda

    @WDETSandra on Twitter and nextchapter@wdet.org