• From Lansing: New Detroit watchdog-ish group meets

    The authority that will oversee the disbursement of $195 million of state money to Detroit’s pension funds if the bankruptcy restructuring plan is approved is holding its first meeting at 9 a.m. Friday.

    We’ll have updates from the meeting. Meanwhile, here’s some background:

    The Michigan Settlement Administration Authority was created as part of the “Grand Bargain” legislation, specifically House Bill 5575. Rep. Fred Durhal Jr. (D-Detroit) was its sponsor. It exists to pay the $195 million to the city’s retirement systems when (if) Judge Steven Rhodes approves the city’s Plan of Adjustment to exit bankruptcy. The authority, according to the statute that created it, dissolves on May 2.

    Members of the Authority are State Treasurer Kevin Clinton, State Budget Director John Roberts and I. William Cohen, who was a senior partner at Pepper Hamilton, one of the law firms advising Detroit in the bankruptcy case, before he retired in 2009. Gov. Rick Snyder named Cohen to the Authority last month.

    9:45 a.m.

    We’re back in open session after the roughly 40-minute closed session. Members said they were discussing a “written memorandum of legal advice.”

    The authority adopted a motion to limit public comment to 5 minutes at future meetings.

    And we’re adjourned.

    9:42 a.m.

    Here’s the Michigan Open Meetings Act Handbook.

    These are the reasons a public body, such as the new Authority, may go into a closed session (as printed in the handbook) with comments on the likelihood today’s session relates to each reason.

    (1) To consider the dismissal, suspension, or disciplining of, or to hear complaints or  charges brought against, or to consider a periodic personnel evaluation of, a public officer, employee, staff member, or individual agent, if the named person requests a
    closed hearing.

    Note: As this is the first ever meeting of this Authority, this seems nearly impossible as the reason for this closed session.

    (2) For strategy and negotiation sessions connected with the negotiation of a collective  bargaining agreement if either negotiating party requests a closed hearing.

    Note: The statute creating the authority does not explicitly give it the power to negotiate contracts. Also, the city has reached collective bargaining agreements with its unions as part of the bankruptcy process. The latest was with police and fire unions. Earlier this year, a coalition representing about 3,500 other city workers agreed to terms.  

    (3) To consider the purchase or lease of real property up to the time an option to purchase or lease that real property is obtained.

    Note: This in no way relates to the authority’s mission.

    (4) To consult with its attorney regarding trial or settlement strategy in connection with specific pending litigation, but only if an open meeting would have a detrimental financial effect on the litigating or settlement position of the public body.

    Note: Ah, OK. As we’ve noted below, Steven Howell is in the closed session. He’s an attorney with the Dickinson Wright firm, but he’s been part of the bankruptcy trial, representing the state of Michigan. As the city’s trial — technically a confirmation hearing on the Plan of Adjustment — is ongoing, perhaps this is the reason. Although with the vast majority of creditors no longer objecting to the plan, it’s unclear how much state strategy is needed. On another note, pending litigation remains challenging the state’s emergency manager law, although some of it goes away per the terms of the Grand Bargain.

    (5) To review and consider the contents of an application for employment or appointment to a public office if the candidate requests that the application remain confidential. However, all interviews by a public body for employment or appointment to a public office shall be held in an open meeting pursuant to this act.

    Note: The authority has no employees.

    (6) To consider material exempt from discussion or disclosure by state or federal statute. But note – a board is not permitted to go into closed session to discuss an attorney’s oral opinion, as opposed to a written legal memorandum.


    9:23 a.m.

    One of the people still in the room is Steven Howell. He’s an attorney with the firm Dickinson Wright, representing the state of Michigan. He’s been involved in Detroit’s bankruptcy case, appearing during the ongoing trial.

    9:07 a.m.

    It took the new Authority about two minutes to go into a closed session (that means members of the public, including media) were kicked out. Staff from the state Attorney General’s office stayed in the room. The only thing the panel did before they “closed the door” was to appoint a secretary and discuss the process for posting meetings.







    By in From Lansing, Pensions, WDET
  • In Bridge: Individual objectors in bankruptcy court

    Most were retired Detroit workers. A few have law degrees. One is a former city councilwoman. They’re 15 “pro se” objectors in the city’s bankruptcy case, individuals without attorneys whom U.S. Bankruptcy Judge Steven Rhodes has allowed to testify, present evidence and question witnesses during the city’s ongoing bankruptcy trial. Here’s Bridge Magazine’s piece about them and what they said in court.

  • Day 20: Detroit’s Bankruptcy Trial

    The city and several creditors announced some major settlements today in the bankruptcy case. Here’s what’s happening:

    10:39 a.m.

    A few more items from this morning’s session:

    Detroit Emergency Manager Kevyn Orr says the city’s attorneys and consultants will contribute back $5 million toward the settlements.

    Court will be in recess until Tuesday morning.

    Here’s the settlement agreement, filed in bankruptcy court this morning.

    10:25 a.m.

    While the settlement between the parties is big news, a few more hurdles need to be jumped:

    Detroit Emergency Manager Kevyn Orr said he will ask the city council to approve the deal as early as next week. “I hope I could appeal to their good graces,” Orr told Judge Steven Rhodes.

    An attorney for the holders of the pension debt certificates, Thomas Moers Mayer, said he has not seen the settlement documents and term sheets and needs to take it to his clients. He said he expects they will be similar to what has been previously negotiated, but with some acceleration of payments, the differences may be material. “We just won’t say yes now,” Mayer said he was told by his client. “There is a chance I’ll have to come back and make some oral arguments if my guys see the documents and there is some problem.”

    10:20 a.m.

    City attorney Corrine Ball, of Jones Day, called it “big news” before she summarized the agreement the city reached with bond insurer Financial Guaranty Insurance Co. and holders of pension debt.

    In part, it includes plans for tearing down the Joe Louis Area and redeveloping the riverfront west of the site. Ball said the development could include condos, a hotel and retail site that would support conventions at Cobo Hall.

    As with bond insurer Syncora, which settlement its $1.4 billion claim last month, the city and FGIC will create a “Development Agreement” that will include “credits” toward future purchase of city assets. FGIC also receives bonds from the B notes and new C note classes in the Plan of Adjustment.

    “We think it’s a very subtantial settlement for us,” said Alfredo Perez, FGIC attorney.

    10:00 a.m.

    The first settlement reported today was between the city and the Macomb County Public Works Commissioner, Anthony Marrocco, who had a $26 million claim related to construction and repairs of the Macomb Interceptor Drain Drainage District.

    The settlement lowers that amount to $22 million and resolves other litigation. The commissioner’s objection to the city’s Plan of Adjustment will be dropped.

    “Thank to you and everyone for your hardwork in achieving this settlement. Please extend my special thanks and appreciation to Mr. Marrocco,” Judge Rhodes told that attorneys.


  • Day 19: Detroit’s Bankruptcy Trial

    It’s fewer attorneys and more pensioners today in bankruptcy court. Judge Steven Rhodes has scheduled several “pro se” objectors who will testify and question witnesses. Pro se objectors are individuals without attorneys, and today’s hearing will include their opposition to parts of the Plan of Adjustment.

    One of them already appeared: Estella Ball questioned Detroit Emergency Manager Kevyn Orr on Day 16 of the confirmation hearing.

    10:22 a.m.

    After she questioned Emergency Manager Kevyn Orr and city attorney Heather Lennox, of Jones Day (see below), city retiree Wanda Jan Hill had a few minutes to testify.

    She told Judge Steven Rhodes that he should “strike the 6.75 percent interest rate from the clawback” of annuity payments some general service retirees will make as part of the bankruptcy settlement.

    “Just as deals or adjustments were made for Syncora and FGIC and I can sort of say the police and fire, Id’ like for you to strike a moderate deal with the retirees. I’d like for you to allow Mr. Orr or someone in his camp to provide us with information about the makeup of this clawback. … There are a lot of questions that are not answered that we need to know. “

    Here is Hill’s objection filed last summer against the city’s Plan of Adjustment.

    10:05 a.m.

    With city attorney Heather Lennox on the witness stand, retiree Wanda Jan Hill continued her questioning about if and how retirees were notified about the 6.75 percent interest rate attached to retirees’ annuity savings fund recoupments before they voted on the Plan of Adjustment earlier this year.

    According to Hill, the ballots relied on the term “other factors” and did not disclose a 6.75 interest rate would be part of retirees’ payback of some of their annuity savings funds to the city. After Emergency Manager Kevyn Orr couldn’t sufficiently answer Hill’s questions (see below), Lennox took the stand to discuss the issues Hill raised about the interest rate on the “clawbacks.”

    Here are some excerpts of their exchanges.

    Hill to Lennox: “What did you know and when did you know it?”

    Lennox responded by recounting the development of what attorneys called the “plain language statement” that was include with pensioners’ ballots. “We reached stipulation with the Retirees Committee,” Lennox said. “In that stipulation that was filed with the court on June 4th, we did specifically include that interest percentage because people had been asking about it. It was also in a letter dated June 4th that went out to retirees who were affected by the correction and the recoupment.”

    Hill: “You said it was not exact. Nowhere in those documents did it tell you there was a 6.75 percent interest tacked on to the ASF recoupment amount so it was not exact. That’s one of the reasons I’m standing here. It was not exact. … That plain language document was, in my view, the ideal document for you to spell everything out, the 6.75 percent. The ‘other factor’ phrase should have fallen by the wayside. … Since it was a plain language document, it should have been plainly explained to us what the clawback was. I think that has a lot of retirees, including myself, all up in arms because you’re taking money away from us but you’re not giving us the right to know what is all the money going for?  … I stil say that “other factors” was used as a ruse to allow you to come back at some other time to say, ‘oh, that was easy. Let’s try to get that money from them on “other factors.” ‘ “

    Hill: “Who came up with the word phrase ‘other factors?’ Who’s responsible for that?”

    Lennox: “The language that was included in all of the documents that you received was drafted initially by the city but it was heavily, heavily reviewed and edited by many, many people who represent the retirees such as the Retirement Systems counsel, the Retirees Committee counsel. We had counsel for the two largest retirees associations in the city that reviewed and comment on that. We also had counsel for the public safety unions, for AFSCME and for the UAW … I would say that those word phrases were the combination for very, very many people who were trying to make things clear and simple for the retirees.

    Hill: “So you don’t know who came up with the word phrase “other factors” therefore you don’t know what “other factors” entails?”

    Lennox: “No ma’am. I said that working was … a very collaborative process to put that language you refer to in those document. I think many people had a hand in that.”

    9:45 a.m.

    The first pro se objector was Wanda Jan Hill, who criticized the lack of communication between the city and retirees about the 6.75 percent interest attached to the recoupment of some annuity savings fund monies.

    Hill wanted to question Heather Lennox, a Jones Day attorney working for the city. City attorneys objected, and Judge Steven Rhodes first had her question Emergency Manager Kevyn Orr.

    Here are excerpts of that exchange.

    Hill: “My motion was relevant to the nondisclosure of the 6.75 percent (interest rate attached to the “clawback” of Annuity Funds from some general service retirees). I don’t know how much of the workings you were involved with that information not being disclosed, but can you explain to me and the court how much involvement did you have with the 6.75 percent interest not being provided in the relevant documents that Class 11 in particular needed in order to make a sound decision?”

    Orr: “I was involved in that process.”

    Hill: “To what extent, relevant to it being a nondisclosure issue?”

    Orr: “I don’t want to mislead you. I don’t look at it as a nondisclosure issue. Without getting into the discussions that occurred between counsel, between the retirement committee (during) the mediation process in terms of getting to that number. I think what I can say is there was no affirmative decision made not to include it in the Disclosure Statement. The concept was there was going to be communication with the Retirees Committee, which we asked this court to empanel, so there would be a conduit of information going back and forth to retirees. My understanding is that information was provided in at least one slide deck that the committee put out to retirees. There were a number of other fliers and communications that went out to retirees prior to the deadline for voting … In addition, I understand there were special discussions with members of that committee as well as members of other groups to try and explain that process. I don’t think there was an intent necessarily not to include it in the Disclosure Statement.”

    Hill: “I beg to differ. In my research I found that the phrase “other factors” was used instead of being forthright and putting all the cards on the table therefor that gave me the impression that it’s something that you don’t want us to know. So when “other factors” was used in at least 10 different documents, it raised a red flag.”

    Then Hill presented a chart of various documents the city filed in the case. She highlighted when the phrase “other factors” was used and when the 6.75 interest rate was specifically mentioned.

    “It was under the guise of ‘other factors,’” she said. “The 6.75 percent interest was a very important number. … this report shows the research that I did relative to life expectancy and ‘other factors.’ …. Every time it was mentioned in a document, this was the phrase that was used. “

    Hill: There was enough space and enough room to break down “other factors” I have a real problem with the fact that ”other factors” was not explained.

    She directed Orr to the April 17 document that corrected how voting by pensioners on the Plan of Adjustment would occur.

    “You can let me know: was the information relevant to the clawback and the ASF … was that known at that time? Did you know you were going to do the clawback?” she asked Orr.

    He replied, “Ma’am. Sitting here right now, I can’t recall. I’d have to look at my notes.”

    Hill: “I’m going to assume you had some idea of what you were going to take from the retirees.”

    Orr: “There were general discussions that I think are covered by the mediation order (preventing public discussion about them), but I think it’s fair to say around that time there were discussions going back and forth.

    Hill: “So the money was an issue at that time.”

    Orr: “I believe there were discussions being had.”

    Hill: There was enough space and enough room to break down “other factors” I have a real problem with the fact that ”other factors” was not explained.

    She directed Orr to the April 17 document that corrected how voting by pensioners on the Plan of Adjustment would occur.

    “You can let me know: was the information relevant to the clawback and the ASF … was that known at that time? Did you know you were going to do the clawback?” she asked Orr.

    He replied, “Ma’am. Sitting here right now, I can’t recall. I’d have to look at my notes.”

    Hill: “I’m going to assume you had some idea of what you were going to take from the retirees.”

    Orr: “There were general discussions that I think are covered by the mediation order (preventing public discussion about them), but I think it’s fair to say around that time there were discussions going back and forth.

    Hill: “So the money was an issue at that time.”

    Orr: “I believe there were discussions being had.”

    Hill: “I think so too because the media talked a lot about what they were going to take from us. … There was an idea of how much money was going to be needed. … By the time we got to Plan of Adjustment Three, you knew that other factors were going to be an issue. I don’t think you would have included ‘other factors’ if you didn’t think it was going to be an issue.”

    Then the judge interrupted.

    “I think what Miss Hill is trying to get to here is whether any of the city’s filed documents specifically disclosed that there was a 6.75 interest rate associated with the ASF recoupment or clawback,” Rhodes explained to Orr.

    Orr: “What I recall, your Honor, is I don’t think it was include with th Disclosure Statement. … There were other documents included on the city’s website. I don’t know if the fliers” and other information provided to retirees included the number.

    “In the circumstances, I think we have to have Miss Lennox testify to the extent to which she can fill in what Mr. Orr doesn’t know.”

  • Q: Who are bankruptcy’s Pro Se Objectors? A: Real people

    As part of the bankruptcy trial, Judge Steven Rhodes is including a handful of individual objectors – people who don’t have attorneys – called “pro se” objectors.

    One of them already questioned Emergency Manager Kevyn Orr and then testified herself. But most of them are expected to begin testifying Wednesday and will cover a variety of topics including: the “clawback” of the annuity savings fund; the voting procedure by various creditor classes (including pensioners) on the Plan of Adjustment; interest rates being used to calculate investment returns.

    Last summer, Rhodes invited 80 individuals to testify about their objections. Here’s a report of that day in court. Some of those are returning during the trial phase. We spoke with Gloria Williams and Steven Wojtowicz in advance of their testimony about their objections and what they’re expecting in court.

    We also interviewed Laura Bartell, professor of law at Wayne State University, about the inclusion of these individuals in the bankruptcy proceeding. She says it’s “not normal.”

    Here’s a transcript of that conversation:

    Sandra Svoboda: Why is the judge including these pro se objectors in the trial?

    Laura Bartell: An objector doesn’t lose the right to object merely because he or she does not have counsel. So if an objector has something relevant to bring before the court, the objector should have an opportunity to stand up in court and make his or her point.

    SS: What role do these objectors play in the bankruptcy trial?

    LB: These particular objectors do not have any dramatic points to make. Most of them are asking for an opportunity to question witnesses about the treatment of their pension claims, about the clawbacks, that sort of thing. We’ve already had one pro se litigant cross examine one of the city’s witnesses on feasibility but they have minor issues about whether the plan is fair and equitable, whether it’s feasible and the judge is going to allow them to question witnesses or present witnesses as they wish to make their points on those issues.

    SS: Is this a normal part of bankruptcy procedure?

    LB: It’s not normal to have pro se objectors. It’s only an unusual situation where you would have individuals not represented by counsel who were objecting to a plan either in Chapter 9 or in Chapter 11.

    SS: Does Judge Rhodes allowing these objectors shed any insight into his thoughts and his handling of this bankruptcy case?

    LB: This is consistent with his solicitude for the individuals who are being affected by the bankruptcy case. He wants to give them every opportunity to make their points publicly because part of that is an emotional resolution. If you can have the sense that you have made your point, it has been heard by the authority figure, that is Judge Rhodes, then even if he overrules your objection you at least feel you’ve gotten a fair shake.

  • A Retiree’s View of Bankruptcy: Previewing her testimony in court

    Retiree Gloria Williams is the former director of elections for the city of Detroit, where she also was a manager of computer applications. She filed this objection and is scheduled to testify during the confirmation hearing. She spoke with Sandra Svoboda, bankruptcy reporter and blogger for WDET and Next Chapter Detroit. Here’s that interview, with a transcript below.

    Sandra Svoboda: Why did you file an objection in the bankruptcy case?

    Gloria Williams: Because of the inconsistencies in the way the balloting took place. First they sent us two ballots. Then they said they made a mistake and they sent us more ballots and it wasn’t clear as to which ballots should be returned, what was going to happen if you’d already returned your ballot and then you send your new ballot in. It wasn’t really clear as to what was going to happen to all of those ballots. Why I was really concerned was there wasn’t an accounting in the final documents as to what happened to the ballots and there’s no audit of the balloting process.

    SS: You’re referring to of course, the voting on the Plan of Adjustment that was done by the different classes of creditors, yours being the retirees or pensioners.

    GW: Correct. You have to understand that there are thousands of retirees who are out there who are in their 70s, 80s, 90s who would be totally confused with how the balloting took place.

    SS: Did you raise these concerns before or during the voting process?

    GW: Well, I wasn’t concerned until the results came back and I read through the results and didn’t see where they accounted for those ballots. They didn’t say how many they had received that were invalid, how many were duplicates and those ballots were never accounted for plus in every election, I don’t care what kind of election it is, that election is supposed to be audited by some independent agency and it wasn’t.

    SS: Have you received notice as to when you’ll be testifying during the confirmation process? What are you anticipating that will be like?

    GW: They did send me documentation and they said I would have to interview the balloting company over the phone because they weren’t coming. (laughs) And I thought that was disrespectful if nothing else.

    SS: What do you plan on telling the judge about your objection?

    GW: I really don’t want to reveal that right now because I don’t want them to be prepared for the answer. (laughs) So I would rather do that when I get to court, that way they will, you know, won’t have time to research and find this case and that case against what I’m proposing. It’s just that after there were so many questions about the balloting process, they should have volunteered to have someone else, some other company review what they did just to validate their process.. So I thought that was odd that they didn’t do that.

  • From a Pro Se Objector: A preview of bankruptcy case testimony

    Steven Wojtowicz retired from the Detroit Water and Sewerage Department after 31 years of work. He’s one of the “pro se” or individual objectors Judge Steven Rhodes is allowing to testify or question witnesses as part of the city’s bankruptcy trial.

    In advance of this testimony this week, he spoke with WDET/Next Chapter Detroit’s Sandra Svoboda. Here’s the document he filed with the court requesting time during the trial.

    Here’s a transcript of that conversation:

    Sandra Svoboda: Why file an objection in the bankruptcy case?

    SW: My original objection was that obviously I thought the recoupment was unfair, the ASF recoupment was unfair but adding on the interest rate wasn’t in the documentations and during the negotiations for the pensions the 6.75 percent was never brought up. It wasn’t brought out, up until the ballots were sent out that people, some people knew about the 6.75 percent if they attended the presentations or received the revised ballot or talked to someone about the 6.75 percent. That was my biggest objection that you know adding on that interest doubles the recoupment amount.

    SS: What have you seen as some of the big issues in the trial so far?

    SW: It seems like they’re just interviewing people I don’t see any big changes other than doing some negotiations with some of the banks and some of the insurance companies. I don’t see much changing I guess for the bankruptcy. Everything just seems to be what it is is going to be what it is, what they decided before the confirmation hearing. I’m not sure if Rhodes is going to bring up anything about our annuity and the interest rate. I’m not sure. I haven’t heard anything positive about that.

    SS: What are you anticipating your testimony will be like?

    SW: In the docket that they came out with response to my objection, a couple of things that they mentioned now here, one things, the 6.75 percent what they said is they clarified the 6.75 percent and added it into the bankruptcy documents but my other questions was the recoupment with interest never ends. It’s a lifetime annuity. But they responded back in that latest docket that no, this ends after you pay back your recoupment. It stops. But in the ballot and in their presentation it says that this goes on for a lifetime. I asked to get a clarification of that. That’s going to be one of my questions.

    SS: Do you feel like your testimony made that change happen?

    SW: I think so because that’s the only place I see it is in their response to my objection. So I would think so. I get a clarification like again, I can’t find it in the bankruptcy documents but it’s in that one docket from the attorneys from the city. So I’ve got to get a clarification on that.

  • What They Said: Bankruptcy in the governor candidates’ town hall

    At 22:10 of the town hall face off last night, moderator Stephen Henderson, Detroit Free Press Editorial Page Editor, asked the candidates about Detroit’s bankruptcy and the emergency manager. Here is a transcription of the questions, the answers and the follow up from Republican candidate Gov. Rick Snyder and the Democratic challenger Mark Schauer.

    Freep columnist Nancy Kaffer weighed in on the topic in this piece today, and moderator Christy McDonald, from our Detroit Journalism Cooperative partner Detroit Public Television, reviewed the town hall today on WDET’s Detroit Today.

    STEPHEN HENDERSON: Detroit, the city of Detroit, has an emergency manager and is trying to get through a complicated bankruptcy. Is this the right policy, the right approach to the relationship between cities and states? Is there more the state needs to do to prevent cities from falling into those financial problems? And what do they need to do to help them out on the back end?

    GOV. RICK SNYDER: That was a big question, Stephen. Let me start the other way with actually what we’re doing now is we’re working on an early warning system to help communities because I never want to appoint an emergency manager, and it’s not a subjective process folks. It’s an objective process. I don’t simply decide that. Certain conditions in terms of a financial emergency have to exist first.

    With respect to Detroit I went through that in a very systematic way. Tring to work with the prior administration in Detroit to say “Let’s just work together.” That didn’t work. We did a consent agreement to say the city needed to do certain thing to get the city out of trouble. Those things weren’t done. So then it came to an emergency manager. So I appointed an emergency manager. And then it came to the question of actually putting Detroit in bankruptcy. That was one of the toughest decisions to be made in the United States. It was the right decision to make.

    Look at where we are today. We’re within a month to two months most likely of coming out of bankruptcy. We would have shed $9 billion of liabilities. If we hadn’t done this, the operating budget for the city of Detroit, more than 60 percent would go to paying past debts. There would be no money for services. In the meantime while this has been going on, what’s been happening? Streetlights have been going up. Trash is being picked up. Public safety is improving. Violent crime is down in double digit percentages in the city of Detroit. All these good things are going on and now we’ve transitioned back out because my goal is to have the emergency manger come in, do their job, get out, be done and get it back to the community with good oversight though so it doesn’t fall backwards. Stop and think: Have you ever thought you’d see Detroit as well poised for a bright future as you see today?

    HENDERSON: Congressman. You have opposed the emergency manager legislation, how would you handle all of this differently?

    SCHAUER: Well, first I believe in democracy. The people voted in 2012 to overturn that law. As governor, placing myself becoming governor in 2011, I would have abided by the will of the voters. What I would have done is personally led. As governor, I will be in Detroit. I will work out of the office on Cadillac Place and be a full partner with Mayor Duggan for the comeback of Detroit. Mayor Duggan is supporting me because he knows that I will be a strong and active partner. We need good jobs in our communities, but what I will do as governor, in addition to personally lead, is put together financial transition teams where we can be proactive. What our current governor has done, two things, is engaging in a strategy of fighting fires, fighting crises. Of course a $69 million revenue-sharing cut for police and fire in the city of Detroit didn’t help. But after cities get into financial crisis and school districts get into financial crisis, they assign emergency managers.

    The second thing, quickly, is I never would have cut retiree pensions. Our constitution is clear: pensions are guaranteed. Again, on top of the pension tax, cutting pensions through the emergency manager, as governor himself, is wrong. It’s hurting people. It’s no way to build a strong economy.

    HENDERSON: Governor, I want to give you a chance to respond to the question about democracy. You’re suspending local democracy when you send in an emergency manager. People in the state voted not to have emergency managers. How do you address that?

    SNYDER: No, what they said is, we’ve had EM going back to Gov. Blanchard in 1988. There have been a lot of EM before I stated this process. In fact, I inherited a number of them. What we did was enhance their skill set so they could do their job and get out. There was a ballot proposal that said certain aspects of it people didn’t like. We listened to that. We didn’t do those things. We put something back in place so we could move forward.

    Think about this: traditionally emergency managers were there way to long. So Detroit, other than the bankruptcy, the city is now running the city of Detroit. We have an emergency manager that now has left in Pontiac, Benton Harbor, Allen Park, Ecorse. It’s working, folks. We’re getting thee cities back on their feet that didn’t have an opportunity to before. Because we know how big the messes were.

    I’ve asked the Congressman. If you’re not going to do things like looking at bankruptcy, a very last resort. And again, it is constitutional. A federal judge said that. I’ve asked the question is, what are you going to do to pay those $9 billion in liabilities? How are you going to have a budget where you have 60 percent going to liability costs?

    HENDERSON: Very quickly, Congressman.

    SCHAUER: We’ll go back to a hypothetical if I had been governor without an emergency manager, that would not have changed the books for the city of Detroit. I’m not questioning whether the city of Detroit needed to go bankrupt but I would have personally led rather than having an unelected, unaccountable person do it and I would never have thrown Detroit city pensioners, police officers, firefighters under the bus. That hurts them.

    SNYDER: We didn’t leave them under the bus. We did the grand bargain, and I want to thank the bipartisan support of the Legislature to work with the foundation community. Retirees did take cuts but we minimized them. I appreciate them. They ended up supporting the agreement and I respect them for their great role in this settlement.

  • The Detroit Bankruptcy Attorneys: For the city and creditors

    Where the bankruptcy attorneys are from:

    Bankruptcy takes a lot of attorneys, that much is clear.

    Following is more information about the lawyers who have appeared during the city’s bankruptcy trial, along with links to their online bios, and their clients (the city or a creditor).

    We also pulled together the location of their home offices – above is the map of the states where they are, below is some detail of firm locations in Michigan and New York City, where we find the highest concentrations.

    (The city’s Jones Day team has five trial attorneys from the District of Columbia’s office, where Detroit Emergency Manager Kevyn Orr used to work.)

    Here’s a detail of the firms in metro Detroit:

    And here’s a detail of the firms in New York City: