Objections are currently getting accepted by Federal Bankruptcy Judge Steven Rhodes to Detroit Emergency Manager Kevyn Orr’s Plan of Adjustment. While highly-paid lawyers make formal filings in legalese, many of the city’s elderly pensioners are taking the time to compose hand-written letters to Rhodes.
Here is a sampling of what’s been filed so far:
Retired Detroit Water and Sewerage Employee Robert Cox pleads with the judge to keep in mind the rising costs of basic necessities and that the proposed 34 percent reduction in his benefits would cause financial hardships for him and his family.
Retiree David White is an octogenarian who worked for Detroit for a quarter of a century. His wife is also a retiree from the city. He explains to Rhodes that he and his wife did not cause the bankruptcy and at his age starting over is impossible. Therefore cutting their benefits would “be traumatic and devastating.”
Mattie Johnson, of Detroit, worked for the city for more than three decades. Johnson tells the court that the proposed reduction in benefits would become a shell game. If the pension is reduced, Johnson says she would have to seek other public benefits such as food stamps.
Elouis Abram tells the judge that between the loss of the pensioners’ health care plan and the proposed 34 percent benefit reduction, he does not know where to turn. Abram itemizes how much more he now has to pay for health care for his multiple medical conditions. Abram says he can’t believe how poorly senior citizens have been treated.
Retiree Joyce Johnson-Jones asks Rhodes for “mercy” when it comes to cutting retiree benefits. She attributes the loss of her house to previous cuts made by Mayors Kwame Kilpatrick and Dave Bing.
The 75-year-old Frances Teague tells the court that cuts to her pension would be devastating to her and her mentally challenged husband who suffers from dementia. She points out that many people make career choices based on benefits to be received later in life.
Objection letters pulled from here: http://www.kccllc.net/detroit/document/list/3666?nh=1
Detroit Emergency Manager Kevyn Orr’s office has released a statement about the city’s Plan of Adjustment and Disclosure Statement filed today in U.S. Bankruptcy Court.
Here’s what the city considers the highlights of the plan:
* Devotes $1.5 billion over 10 years to capital improvements, blight removal and equipment and technology upgrades.
* During the next five years, up to $500 million of the $1.5 billion will go toward blight removal.
* Proposes 20 percent payment to unsecured, non-retiree creditors in the form of new securities from the city and a pledge to increase that if the city’s finances improve.
* Assumes $465 million from third-party donors and the Detroit Institute of Arts toward the pension funds over two decades, subject to city and pension fund agreement and conditions.
* Includes Gov. Rick Snyder’s proposal to send $350 million of state money to Detroit over 20 years.
* Allows that if police and fire pensioners agree to the plan and there is some settlement with the state, they could receive more than 90 percent of their pensions with the elimination of cost-of-living allowances. General retirees cold receive in excess of 70 percent of their pensions after elimination of cost of living allowances.
* Moves current city employees into defined benefit plans.
In other development, mediations continue toward agreements with key creditors in the process overseen by Chief U.S. District Judge Gerald Rosen. Talks are ongoing for the interest-rate, pension debt swaps agreement as well as the future of the Detroit Water and Sewerage Department.
Was Detroit even eligible to file for bankruptcy?
Today the 6th Circuit Court of Appeals agreed to answer that question, raised by a group of pensioners. The panel in Cincinnati said it would hear the group’s appeal which is a challenge to the December decision from Bankruptcy Judge Steven Rhodes who ruled Detroit was authorized to pursue its landmark bankruptcy case.
For the time being, the 6th Circuit is not expediting the appeal.
“It’s definitely an encouraging development in the case. The 6th Circuit in its order said that the issues in the petition relevant to eligibility warranted direct appeal primarily because they are a matter of such public importance,” says Ryan Plecha, an attorney representing retired city workers including police and fire.
Plecha says there is no timeline for the appeal process set. He and other attorneys representing city employees will continue mediation talks with the city while their appeal of the bankruptcy. “Uncertainty remains as to what the ultimate decision or ruling will be,” he says. ‘This is a very promising event.”
Here is the pensioners’ petition for permission to appeal: