Posts tagged with ‘Pensions’

  • Lessenberry on Adjustment Plan: City probably will cut pensions

    Michigan Radio’s Jack Lessenberry has a few predictions about Detroit’s plan of adjustment, expected to be filed in bankruptcy court this week. On “This Week in Michigan Politics,” Lessenberry and Christina Shockley discuss potholes, an effort to raise Michigan’s minimum wage and the upcoming trial challenging marriage equality in the state as well as the city’s plan of adjustment.

    “It’s probably going to include pension cuts,” Lessenberry predicts. “it’s probably not going to include looting the DIA.”

  • Early Legacy: Impact already felt in Detroit’s bankruptcy

    The city’s bankruptcy filing and resulting legal tangles, mediation and early restructuring discussions have already had an impact on business practices, legal structures, general obligation bonds and public pensions, the Detroit Free Press reports today.

    Reporter Nathan Bomey examines four ways Wall Street is changing because of Detroit’s dynamics. “Wall Street is quickly changing how it views municipal debt in the midst of the largest municipal bankruptcy in U.S. history,” he writes. Detroit “could uproot traditional financial principles about investing in public bonds, once thought to be rock-solid debt.”

     

  • Detroit Discussed: American Enterprise Institute brings bankruptcy analysis

    In what could have been the “Bankruptcy Combined” event, a team of academics, researchers, lawyers and municipal finance experts broke down and analyzed some of Detroit’s bankruptcy issues in a Tuesday event that’s now available in on-demand replays.

    If you’re a fan of privatization and data-driven decisionmaking, you’re a teammate of the presenters, drafted by the American Enterprise Institute in Washington D.C.

    If you’re an unwavering union supporter or waving the flag of home rule, this team is going to raise your blood pressure.

    Pensions, bonds, private-public partnerships, patterns of urban de-population and housing devaluation: All were explored in the two-hour session. Presenters reiterated the national implications of Detroit’s situation of declining population and revenue and lack of restructured services, operations and debt obligations.

    “One reason it’s so important is because there area bunch of other cities that are in the same predicament,” says David Skeel, professor of corporate law at University of Pennsylvania and one of the presenters. To Skeel, it’s “pretty clear” the pensions will be restructured in Detroit’s post-bankruptcy plans.

    The mere possibility that Detroit could default on municipal bonds defies history, according to John Mousseau, executive vice president and director of fixed income and a municipal bond portfolio manager at Cumberland Advisors in Sarasota, Fla. Less than one half of one percent of bonds have defaulted in the history of municipal markets, according to Mousseau. So the discussion about Detroit’s restructuring of its bond obligations means “we’re more or less in uncharted territory,” Mousseau says.

    Other panelists were Michael Barone, senior political analyst for The Washington Examiner and a resident fellow at AEI, R. Richard Geddesassociate professor in the department of policy analysis and management at Cornell University, and Andrew Biggs, resident scholar at AEI.

    The entire two-hour event is available at http://www.aei.org/events/2014/02/18/the-detroit-bankruptcy-conflicts-and-implications/

    -By WDET’s Sandra Svoboda

    @WDETSandra and nextchapter@wdet.org

  • Five Bankruptcy Bits for Monday Morning

    As we anticipate the release of the city’s Plan of Adjustment in the coming week, here are five stories from the weekend that Next Chapter Detroit doesn’t want readers to miss:

    Time to see whether Detroit’s big bet on shedding its debt pays off

    In advance of the city’s restructuring plan, expected in court this week, Stephen Henderson, editorial page editor at the Detroit Free Press, predicts: “If Detroit’s emergency manager has his way, the city will walk from nearly 80% of its debt to banks and insurers. Most important, he will treat bondholders, including those whose debt has never been subject to principal write-downs in a bankruptcy, the same as every other lender.”

    Patrolling a Bruised City

    The New York Times “Vocation” feature talked with a Detroit police officer about what it’s like to patrol the streets of the bankrupt city and live with the uncertainty of the city’s future finances.

    The Looting of Detroit’s Pensions

    The American Enterprise Institute weighs in on the history and future of Detroit’s pension systems and concludes, in part: “It’s hard to know what should be done about Detroit’s pensioners, many of whom would truly be impoverished if subjected to major benefit cuts. But the conventional morality play painting Detroit’s employees as mere bystanders to the city’s fiscal bankruptcy is clearly wrong.” AEI will host a panel discussion in Washington D.C. Tuesday afternoon titled “The Detroit Bankruptcy: Conflicts and implications” that will stream online. More information at: www.aei.org/events/2014/02/18/the-detroit-bankruptcy-conflicts-and-implications/

    Q & A: What is a Bankruptcy Mediator’ Role?

    The Wall Street Journal provides a succinct explanation of what U.S. District Court Chief Judge Gerald Rosen is doing behind the scenes of the bankruptcy negotiations.

    Bankruptcy and Blight: The technology behind the new authority

    Have you wondered exactly how the Detroit Blight Authority is mapping all the city’s properties? Crain’s Detroit Business profiles Loveland Technologies Inc., the new company with new technology … and a new approach.

    -By WDET’s Sandra Svoboda

    @WDETSandra and nextchapter@wdet.org

     

  • Bridge brings ‘Detroit’ to your community

    Don’t think that Detroit is alone among Michigan cities in facing sometimes staggering legacy costs in pensions and health care for retirees.

    In a compelling piece, Bridge Magazine explored the issue in other cities and townships around the state, drawing on a Michigan State University study of “legacy debt.”.

    Bridge also created an easily searchable database for community-by-community analysis. Try it for your community…and tell us what you find!

    Taken by Flickr user, Andre_44

    Taken by Flickr user, Andre_44