Wednesday, August 21, 2013

Detroit Retirees Interviewed to Serve on Bankruptcy Case Committee

August 20, 2013 at 11:38 pm

Detroit retirees interviewed to serve on bankruptcy case committee

Robert Snell and Christine Ferretti
The Detroit News

Detroit— City retirees interested in serving on a committee that will represent more than 23,500 former municipal workers during Detroit’s historic bankruptcy case were interviewed by the U.S. Trustee on Tuesday.

The retirees were invited to a morning meeting at U.S. District Court in downtown Detroit. Private interviews were then held with some retirees, who are expected to fight to preserve vested pension benefits targeted for cuts during the city’s Chapter 9 bankruptcy case.

U.S. Trustee Daniel McDermott, who oversees Michigan and Ohio, said the committee must speak with one voice while representing thousands of retirees. About 90 people applied to serve on the committee that could have nine members, give or take, he added.

“This is a unique case. Many of you are no doubt anxious and uncertain how the outcome of this case may affect you personally,” McDermott told about 70 retirees and lawyers gathered at federal court. “Your efforts will make a difference.”

The committee was not appointed Tuesday. A notice will be filed in bankruptcy court in the coming days, McDermott said.

The committee can hire lawyers and accountants to work on retirees’ behalf, McDermott said. The bills will be paid by the city.

McDermott fielded questions from several retirees.

Retired Detroit Water and Sewerage worker David Sole wanted to know how quickly the committee will start negotiating and whether talks could begin before U.S. Bankruptcy Judge Steven Rhodes decides whether Detroit is eligible for bankruptcy protection.

McDermott said negotiations will start once the committee hired a lawyer and any professional help.

Sole, who retired in January, said it was “ridiculous” for the committee to begin negotiating before a determination is made on eligibility.

“I’ve come to make my bid as a rank and file retiree,” said Sole, about his desire to serve on the committee. “I just want to make sure that the voices of grass-roots are heard.”

The meeting came one day after scores of creditors and citizens objected to Detroit’s bankruptcy filing, arguing the city did not qualify for Chapter 9 relief.

Emergency Manager Kevyn Orr and Rhodes want to create the committee so retired workers who are not represented by unions can have a voice during the bankruptcy.

Orr has said he wants to pare down an estimated $3.5 billion in pension debt — a figure the city’s pension funds dispute as overinflated by at least $2 billion.

Orr contends federal bankruptcy laws empowering insolvent municipalities to cut debts override the state’s constitutional protection of contractual pension obligations.

Orr has not proposed specific cuts for pensions, but he wants to lump the unfunded liability in with $11.5 billion in unsecured debts and pay those creditors a $2 billion settlement — about 17 cents for each dollar owed.

rsnell@detroitnews.com
(313) 222-2028
Staff writer Chad Livengood contributed.

From The Detroit News: http://www.detroitnews.com/article/20130820/METRO01/308200055#ixzz2cZtUZMtP

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