Detroit Trial on Bankers "Plan of Adjustment" Delayed Again Amid Escalation in Public Pension Thefts From the United States to Quebec
Chad Livengood
Detroit News Lansing Bureau
U.S. Bankruptcy Judge Steven Rhodes on Tuesday delayed by another week the trial over Detroit’s debt-cutting bankruptcy exit plan.
Rhodes moved the trial to Aug. 21, more than a month later than originally planned.
The judge also trimmed the number of possible trial days from 28 days to 23 days and scheduled an Aug. 19 pretrial conference and hearing over the legality of the city’s settlement with the insurers of unlimited tax general obligation bonds.
Rhodes had initially planned to start a trial over Detroit’s plan to dump $7 billion in bankruptcy court in mid-July, but he has twice delayed the start of the proceedings.
The last delay was due to disputes between Detroit and bond insurer Syncora Guarantee Inc. over the holdout creditor’s massive documents requests.
Syncora had pushed to have the trial delayed until late September to allow for more time to gather evidence and take depositions of the city’s witnesses.
clivengood@detroitnews.com
From The Detroit News: http://www.detroitnews.com/article/20140729/METRO01/307290124#ixzz38v2XFk6A
Montreal police call in sick to protest planned pension changes
Around 100 Montreal police officers called in sick Saturday, a new pressure tactic to protest a proposed pension reform law.
The ongoing dispute about planned changes to Montreal police pensions took a new turn overnight Friday when more than 100 officers chose to call in sick simultaneously.
The province's labour relations board had to call an emergency meeting with the police union when they caught wind of the plan. The talks between the board and the Montreal Police Brotherhood union began at 2 a.m. and ran until 6 a.m.
The board declared the action illegal and ordered all the officers back to work. But many stayed home regardless.
Early Saturday morning, the city of Montreal received word that 100 police officers would be calling in sick, an apparent pressure tactic to voice their displeasure with a proposed pension reform law.
The Police Brotherhood denied encouraging its members to call in sick. Montreal Mayor Denis Coderre called this latest pressure tactic unacceptable.
"I've been in politics for 30 years. They can yell at me, they can boo me, they can talk against issues, that's democracy. We can have those kinds of discussions. But if they're using some tactics that will have a direct impact on the citizens, there will be consequences," he told CTV Montreal.
Montreal police say that despite the high number of officers who called in sick, they were able to ensure that the usual number of officers were out on the streets. But they say they had to call in several officers to work overtime to make it happen.
Coderre says it will be the police union who will have to pay for all that overtime.
The officers are angry about Bill 3, which would see municipal workers begin contributing 50 per cent of their pensions. Montreal police officers currently contribute 24 per cent. Other municipal workers such as firefighters and bus drivers have also spoken out loudly against Bill 3.
Earlier this month, police officers chose to protest the bill by wearing red ball caps and "non-standard issue trousers," such as camouflage pants, while on the job.
The province says the current system is not sustainable because the municipal pension plan is already running a $3.9-billion deficit. Municipal Affairs Minister Pierre Moreau has said that Bill 3 will bring balance.
The bill enters public hearings at the end of August.
With a report from CTV Montreal's Kevin Gallagher
Read more: http://www.ctvnews.ca/canada/montreal-police-call-in-sick-to-protest-planned-pension-changes-1.1933611#ixzz38v00WcvM
L.A. Will Appeal Pension Rollback, Mayor’s Office Says
By James Nash - Jul 29, 2014
Los Angeles will appeal an administrative panel’s decision to roll back changes in public employee pensions that were expected to save as much as $4.3 billion over 30 years, a spokesman for Mayor Eric Garcetti said.
The second most-populous city’s Employee Relations Board concluded yesterday that officials failed to properly consult with municipal employee unions before pushing through the changes in a City Council vote in October 2012.
“This drives a stake through” the city’s efforts to change retirement benefits for new hires, said Ellen Greenstone, a lawyer for the Coalition of LA City Unions, which represents about 20,000 civilian employees. “The city has to meet and confer if it wants to change pension benefits.”
The city will appeal the board’s 5-0 vote in court, Jeff Millman, a spokesman for the mayor, said by e-mail. Millman said Garcetti, a 43-year-old Democrat, disagreed with the ruling, although Millman didn’t spell out the reasons.
The council’s 2012 vote was part of a national movement by state and local governments to reduce pension benefits and whittle down unfunded promises to retirees that the Pew Charitable Trusts estimated at more than $1 trillion at the time. The funding gap for state pension plans grew 14 percent between 2010 and 2012, Pew said.
Garcetti voted for the pension rollback as a member of the City Council in 2012, and then-Mayor Antonio Villaraigosa signed the measure into law.
Liability Increase
Without reducing pensions for new employees, Los Angeles faced a 45 percent increase in its contribution toward employee pensions and similar growth in the pension’s unfunded liability, City Administrative Officer Miguel Santana said in a 2012 report. The reduced benefits, along with higher retirement ages and income caps, would save $3.9 billion to $4.3 billion over 30 years, according to the report.
A month before the Los Angeles City Council’s vote, California Governor Jerry Brown signed into law changes to state pensions projected to save as much as $55 billion over 30 years.
The state measure capped at $110,100 the portion of salary used to calculate pension benefits, boosted the retirement age for civilian employees to 67 from 55, and made formulas for calculating retirement income less generous.
The Los Angeles measure, which took effect in July 2013, also took aim at formulas that had allowed employees to retire at 55 with pensions equal to 65 percent of income with 30 years of tenure.
Under the change, a deputy city attorney earning $129,927 and retiring at 65 with 30 years of service would have his or her pension reduced to $77,974 a year from $84,212, according to Santana’s report. The city has hired about 800 new civilian workers since the change went into effect last year, Santana said.
To contact the reporter on this story: James Nash in Los Angeles at jnash24@bloomberg.net
To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Pete Young, Jeffrey Taylor
Judge suggests Stockton worker pensions could be reduced in city’s bankruptcy case
By Dale Kasler
dkasler@sacbee.com
Monday, Jul. 14, 2014 - 8:56 am
Government pensions were once considered untouchable, ironclad, off limits even if the employer went bankrupt.
On Tuesday, a federal bankruptcy judge in Sacramento inched closer to changing all that. Commenting during a hearing on Stockton’s bankruptcy case, U.S. Bankruptcy Judge Christopher Klein suggested that employees and retirees could have their pensions reduced to facilitate the city’s financial reorganization.
“I might be persuaded that … the pensions can be adjusted,” Klein said.
The judge stressed he hasn’t made a ruling yet, and said “I’ve been sharing with you my thinking.” Nonetheless, his remarks could have broad implications for public pensions and bankruptcy law in California and beyond.
Klein acknowledged that Stockton’s retirees are facing “a haircut” if he rules that pensions can be reduced. His comments sparked concern from Steven Felderstein, a Sacramento lawyer representing Stockton retirees in the bankruptcy.
“It’s very troubling, but he does recognize that the retirees are the ones who are going to suffer,” Felderstein said.
In a prepared statement, CalPERS said it “will continue to protect the benefits promised to our members. We welcome the opportunity to respond to the questions Judge Klein raised in court (Tuesday), to discuss the implications of the California laws that govern pensions and that create a stable retirement system that provides significant value to cities and their employees.”
The dispute over pensions stems from Stockton’s plan to exit bankruptcy protection. The city reached agreement with most of its creditors last fall to restructure about $200 million in debts. Many creditors accepted around 50 cents on the dollar. But negotiations fell apart with Franklin Templeton Investments of San Mateo, and the city told the court it would give the firm barely a penny on the dollar on a $36 million debt.
Franklin went to war, launching a full-scale legal challenge to the city’s plan. At a trial last month, Franklin suggested that Stockton scale back its $29 million-a-year pension contribution to CalPERS.
CalPERS said that could not happen. The powerful California Public Employees’ Retirement System has long stood as a defender of government pensions in court, and said Stockton had to keep paying in full to remain in good standing.
Not paying in full, according to CalPERS and city officials, would lead to chaos. If Stockton defaulted on its obligations to CalPERS, pension benefits could be slashed by 60 percent, according to trial testimony last month. City officials say that would lead to a mass exodus of police, firefighters and other municipal employees, making the city essentially ungovernable.
City officials said it’s far from certain that the judge will force a cutback in pensions.
“He’s thinking about it; I don’t believe he’s made up his mind,” said one of the city’s bankruptcy lawyers, Marc Levinson.
Even if Klein does rule that pensions can be reduced, that doesn’t necessarily mean Stockton’s retirees will get hit. He could conceivably decide that the Stockton reorganization plan is fine even if it leaves pensions unaffected.
The legal turmoil over public pensions has been building for some time. Last fall, the judge overseeing Detroit’s bankruptcy said pensions could be scaled back to conserve money. CalPERS has argued that the Detroit case is irrelevant and California public pensions have broader legal protections.
In court Tuesday, the judge seemed to chip away at some of CalPERS’ defenses. For instance, CalPERS has said that it could place a lien on some of Stockton’s municipal assets to cover nonpayment of pension contributions. Klein indicated he doesn’t think CalPERS has that power.
“Why should I take that lien seriously?” he said.
The city did raise its offer to Franklin. The judge ruled Tuesday that Franklin’s collateral on its debt – a couple of golf courses and a city park – were worth $4 million. Levinson said the city would pay Franklin that amount in cash.
But that still amounts to a little more than 10 cents on the dollar, and it was uncertain if that would appease Franklin. The firm’s lawyer, James Johnston, referred a reporter to a company spokeswoman, who couldn’t be reached for comment.
A formal decision is months away; Klein scheduled a hearing on the pension issue for Oct. 1 in U.S. Bankruptcy Court in Sacramento.
In the meantime, CalPERS has been making peace with California’s other bankrupt city, San Bernardino, which had threatened to tackle the issue of pension costs. Last month the two sides reached an “interim agreement” that could stave off a separate legal battle over pensions in that city. No details have been released, but city attorneys have indicated that San Bernardino will repay CalPERS for overdue pension contributions.
After filing for bankruptcy protection in 2012, the city withheld payments from CalPERS for several months and still owes $13.5 million plus interest.
Read more here: http://www.sacbee.com/2014/07/08/6542362/judge-suggests-stockton-worker.html#storylink=cpy
 |
| Detroit retirees, workers demonstrate against bankruptcy theft of pensions, healthcare and public assets chanting "Make the Banks Pay!" |
Detroit News Lansing Bureau
U.S. Bankruptcy Judge Steven Rhodes on Tuesday delayed by another week the trial over Detroit’s debt-cutting bankruptcy exit plan.
Rhodes moved the trial to Aug. 21, more than a month later than originally planned.
The judge also trimmed the number of possible trial days from 28 days to 23 days and scheduled an Aug. 19 pretrial conference and hearing over the legality of the city’s settlement with the insurers of unlimited tax general obligation bonds.
Rhodes had initially planned to start a trial over Detroit’s plan to dump $7 billion in bankruptcy court in mid-July, but he has twice delayed the start of the proceedings.
The last delay was due to disputes between Detroit and bond insurer Syncora Guarantee Inc. over the holdout creditor’s massive documents requests.
Syncora had pushed to have the trial delayed until late September to allow for more time to gather evidence and take depositions of the city’s witnesses.
clivengood@detroitnews.com
From The Detroit News: http://www.detroitnews.com/article/20140729/METRO01/307290124#ixzz38v2XFk6A
Montreal police call in sick to protest planned pension changes
Around 100 Montreal police officers called in sick Saturday, a new pressure tactic to protest a proposed pension reform law.
The ongoing dispute about planned changes to Montreal police pensions took a new turn overnight Friday when more than 100 officers chose to call in sick simultaneously.
The province's labour relations board had to call an emergency meeting with the police union when they caught wind of the plan. The talks between the board and the Montreal Police Brotherhood union began at 2 a.m. and ran until 6 a.m.
The board declared the action illegal and ordered all the officers back to work. But many stayed home regardless.
Early Saturday morning, the city of Montreal received word that 100 police officers would be calling in sick, an apparent pressure tactic to voice their displeasure with a proposed pension reform law.
The Police Brotherhood denied encouraging its members to call in sick. Montreal Mayor Denis Coderre called this latest pressure tactic unacceptable.
"I've been in politics for 30 years. They can yell at me, they can boo me, they can talk against issues, that's democracy. We can have those kinds of discussions. But if they're using some tactics that will have a direct impact on the citizens, there will be consequences," he told CTV Montreal.
Montreal police say that despite the high number of officers who called in sick, they were able to ensure that the usual number of officers were out on the streets. But they say they had to call in several officers to work overtime to make it happen.
Coderre says it will be the police union who will have to pay for all that overtime.
The officers are angry about Bill 3, which would see municipal workers begin contributing 50 per cent of their pensions. Montreal police officers currently contribute 24 per cent. Other municipal workers such as firefighters and bus drivers have also spoken out loudly against Bill 3.
Earlier this month, police officers chose to protest the bill by wearing red ball caps and "non-standard issue trousers," such as camouflage pants, while on the job.
The province says the current system is not sustainable because the municipal pension plan is already running a $3.9-billion deficit. Municipal Affairs Minister Pierre Moreau has said that Bill 3 will bring balance.
The bill enters public hearings at the end of August.
With a report from CTV Montreal's Kevin Gallagher
Read more: http://www.ctvnews.ca/canada/montreal-police-call-in-sick-to-protest-planned-pension-changes-1.1933611#ixzz38v00WcvM
L.A. Will Appeal Pension Rollback, Mayor’s Office Says
By James Nash - Jul 29, 2014
Los Angeles will appeal an administrative panel’s decision to roll back changes in public employee pensions that were expected to save as much as $4.3 billion over 30 years, a spokesman for Mayor Eric Garcetti said.
The second most-populous city’s Employee Relations Board concluded yesterday that officials failed to properly consult with municipal employee unions before pushing through the changes in a City Council vote in October 2012.
“This drives a stake through” the city’s efforts to change retirement benefits for new hires, said Ellen Greenstone, a lawyer for the Coalition of LA City Unions, which represents about 20,000 civilian employees. “The city has to meet and confer if it wants to change pension benefits.”
The city will appeal the board’s 5-0 vote in court, Jeff Millman, a spokesman for the mayor, said by e-mail. Millman said Garcetti, a 43-year-old Democrat, disagreed with the ruling, although Millman didn’t spell out the reasons.
The council’s 2012 vote was part of a national movement by state and local governments to reduce pension benefits and whittle down unfunded promises to retirees that the Pew Charitable Trusts estimated at more than $1 trillion at the time. The funding gap for state pension plans grew 14 percent between 2010 and 2012, Pew said.
Garcetti voted for the pension rollback as a member of the City Council in 2012, and then-Mayor Antonio Villaraigosa signed the measure into law.
Liability Increase
Without reducing pensions for new employees, Los Angeles faced a 45 percent increase in its contribution toward employee pensions and similar growth in the pension’s unfunded liability, City Administrative Officer Miguel Santana said in a 2012 report. The reduced benefits, along with higher retirement ages and income caps, would save $3.9 billion to $4.3 billion over 30 years, according to the report.
A month before the Los Angeles City Council’s vote, California Governor Jerry Brown signed into law changes to state pensions projected to save as much as $55 billion over 30 years.
The state measure capped at $110,100 the portion of salary used to calculate pension benefits, boosted the retirement age for civilian employees to 67 from 55, and made formulas for calculating retirement income less generous.
The Los Angeles measure, which took effect in July 2013, also took aim at formulas that had allowed employees to retire at 55 with pensions equal to 65 percent of income with 30 years of tenure.
Under the change, a deputy city attorney earning $129,927 and retiring at 65 with 30 years of service would have his or her pension reduced to $77,974 a year from $84,212, according to Santana’s report. The city has hired about 800 new civilian workers since the change went into effect last year, Santana said.
To contact the reporter on this story: James Nash in Los Angeles at jnash24@bloomberg.net
To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Pete Young, Jeffrey Taylor
Judge suggests Stockton worker pensions could be reduced in city’s bankruptcy case
By Dale Kasler
dkasler@sacbee.com
Monday, Jul. 14, 2014 - 8:56 am
Government pensions were once considered untouchable, ironclad, off limits even if the employer went bankrupt.
On Tuesday, a federal bankruptcy judge in Sacramento inched closer to changing all that. Commenting during a hearing on Stockton’s bankruptcy case, U.S. Bankruptcy Judge Christopher Klein suggested that employees and retirees could have their pensions reduced to facilitate the city’s financial reorganization.
“I might be persuaded that … the pensions can be adjusted,” Klein said.
The judge stressed he hasn’t made a ruling yet, and said “I’ve been sharing with you my thinking.” Nonetheless, his remarks could have broad implications for public pensions and bankruptcy law in California and beyond.
Klein acknowledged that Stockton’s retirees are facing “a haircut” if he rules that pensions can be reduced. His comments sparked concern from Steven Felderstein, a Sacramento lawyer representing Stockton retirees in the bankruptcy.
“It’s very troubling, but he does recognize that the retirees are the ones who are going to suffer,” Felderstein said.
In a prepared statement, CalPERS said it “will continue to protect the benefits promised to our members. We welcome the opportunity to respond to the questions Judge Klein raised in court (Tuesday), to discuss the implications of the California laws that govern pensions and that create a stable retirement system that provides significant value to cities and their employees.”
The dispute over pensions stems from Stockton’s plan to exit bankruptcy protection. The city reached agreement with most of its creditors last fall to restructure about $200 million in debts. Many creditors accepted around 50 cents on the dollar. But negotiations fell apart with Franklin Templeton Investments of San Mateo, and the city told the court it would give the firm barely a penny on the dollar on a $36 million debt.
Franklin went to war, launching a full-scale legal challenge to the city’s plan. At a trial last month, Franklin suggested that Stockton scale back its $29 million-a-year pension contribution to CalPERS.
CalPERS said that could not happen. The powerful California Public Employees’ Retirement System has long stood as a defender of government pensions in court, and said Stockton had to keep paying in full to remain in good standing.
Not paying in full, according to CalPERS and city officials, would lead to chaos. If Stockton defaulted on its obligations to CalPERS, pension benefits could be slashed by 60 percent, according to trial testimony last month. City officials say that would lead to a mass exodus of police, firefighters and other municipal employees, making the city essentially ungovernable.
City officials said it’s far from certain that the judge will force a cutback in pensions.
“He’s thinking about it; I don’t believe he’s made up his mind,” said one of the city’s bankruptcy lawyers, Marc Levinson.
Even if Klein does rule that pensions can be reduced, that doesn’t necessarily mean Stockton’s retirees will get hit. He could conceivably decide that the Stockton reorganization plan is fine even if it leaves pensions unaffected.
The legal turmoil over public pensions has been building for some time. Last fall, the judge overseeing Detroit’s bankruptcy said pensions could be scaled back to conserve money. CalPERS has argued that the Detroit case is irrelevant and California public pensions have broader legal protections.
In court Tuesday, the judge seemed to chip away at some of CalPERS’ defenses. For instance, CalPERS has said that it could place a lien on some of Stockton’s municipal assets to cover nonpayment of pension contributions. Klein indicated he doesn’t think CalPERS has that power.
“Why should I take that lien seriously?” he said.
The city did raise its offer to Franklin. The judge ruled Tuesday that Franklin’s collateral on its debt – a couple of golf courses and a city park – were worth $4 million. Levinson said the city would pay Franklin that amount in cash.
But that still amounts to a little more than 10 cents on the dollar, and it was uncertain if that would appease Franklin. The firm’s lawyer, James Johnston, referred a reporter to a company spokeswoman, who couldn’t be reached for comment.
A formal decision is months away; Klein scheduled a hearing on the pension issue for Oct. 1 in U.S. Bankruptcy Court in Sacramento.
In the meantime, CalPERS has been making peace with California’s other bankrupt city, San Bernardino, which had threatened to tackle the issue of pension costs. Last month the two sides reached an “interim agreement” that could stave off a separate legal battle over pensions in that city. No details have been released, but city attorneys have indicated that San Bernardino will repay CalPERS for overdue pension contributions.
After filing for bankruptcy protection in 2012, the city withheld payments from CalPERS for several months and still owes $13.5 million plus interest.
Read more here: http://www.sacbee.com/2014/07/08/6542362/judge-suggests-stockton-worker.html#storylink=cpy
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