Detroit files for Chapter 9 bankruptcy [UPDATED: Detroit is Eligible]

reply to post by pavil


She was also on the General Pension Board for a time.....
www.detroitnews.com...
www.my50chicago.com...

Originally posted by DontTreadOnMe
reply to post by pavil

 

She was also on the General Pension Board for a time.....
www.detroitnews.com...
www.my50chicago.com...

Lovely......why am I not surprised. Trouble is they never really get punished for the things they do.

Originally posted by badgerprints

Originally posted by marg6043

So when a Bankruptcy happens on a city I wonder now, if the Federal government step in and pays for the debt to the banks so they don't lose the money, or if the banks can go after the taxes the city of state gets.

You can bet that the taxpayers will bear the brunt of it somehow.

Sadly I think you are correct here, if the State of Michigan takes over somehow they will try to piggyback off of the state and lock it in long term.

What sucks is the fact that some retirees that are collecting pensions never even worked a day in their life, they were put on the payroll because they knew someone.

Mayor Bing weeded out lots of mysterious teachers getting paid in Detroit a few years back by making everyone come in, and pick up their paychecks personally. I forget the numbers but 100's of so called teachers that had been getting paid for decades didn't even show up.

Detroit is a work in progress for sure.

Oh how the mighty have fallen. The once great exemplar of industrial production and producer of icons.

I was shocked when this happened...I thought it'd already happened several months ago.

Seriously, though, so sad for the city. The only people left there are the ones too poor to escape.

The Meredith Whitney effect. I'm sure there will be more to follow.

link

And here’s what’s going to happen: because taxpayers—both corporations and individuals—can actually pack up and move to avoid a dramatically lower quality of life and the final tax bill on municipal borrowings,

Ms. Whitney sees a radical redrawing of the economic power map. Those 17 flyover states in the central corridor are going to emerge as winners, while the overleveraged housing-boom high-fliers like California, Nevada, Florida and Arizona grapple with what she calls the Negative Feedback Loop From Hell—higher debt requires higher taxes, which drives people and companies out of town or state, which lowers the tax base, which results in further budget cuts, which reduces quality of life, which causes the value of real estate to decline, which lowers tax receipts, which … you get the point. It’s called Detroit.

We’re approaching the endgame quickly. While states have been able to put Band-Aids over their budget gaps to date by using rainy-day funds, stimulus money or muni market borrowing, or by raising taxes, “these levers have all already been pulled,” writes Ms. Whitney. The states have taken on close to $1.5 trillion in new debt since 2000, almost doubling their borrowings in the process.

link

someone already posted the infor that a michigan judge halted the plan for bankruptcy


the pensions are constitutionally protected


weird choice of words

Originally posted by ripcontrol
someone already posted the infor that a michigan judge halted the plan for bankruptcy


the pensions are constitutionally protected


weird choice of words

edit on 21-7-2013 by ripcontrol because: fixxed

I would love to hear the reasoning for this one

Weird is right.

reply to post by Realtruth

here's the link for reference
www.abovetopsecret.com...

There were lawsuits pending about the bankruptcy filing and the constitutional guarantees...from what I gathered there were some legal shenanigans involved which involve a 5 minute delay
money.cnn.com...
money.cnn.com...

“I have some very serious concerns because there was this rush to bankruptcy court that didn’t have to occur and shouldn’t have occurred,” Aquilina said.

“Plaintiffs shouldn’t have been blindsided,” and “this process shouldn’t have been ignored.”

www.freep.com...

Originally posted by DontTreadOnMe
reply to post by Realtruth

 

here's the link for reference
www.abovetopsecret.com...

There were lawsuits pending about the bankruptcy filing and the constitutional guarantees...from what I gathered there were some legal shenanigans involved which involve a 5 minute delay
money.cnn.com...
money.cnn.com...

“I have some very serious concerns because there was this rush to bankruptcy court that didn’t have to occur and shouldn’t have occurred,” Aquilina said.

“Plaintiffs shouldn’t have been blindsided,” and “this process shouldn’t have been ignored.”

www.freep.com...

That Judge's ruling is expected to be overruled in the already filed appeal. Michigan has a lot of , shall we say, union appointed Judges. It's just a matter of not enough money for all the promises Detroit made to it's retiree's. We see it everywhere with pensions, not just Cities, it's States and Companies too. Take a look, only 2 States have fully funded Pensions.

Pension Funding by State

reply to post by DontTreadOnMe


More on the Judge who is trying to stop the Bankruptcy:

Aquilina, who like most of the judges on the Ingham court has a Democratic background, appeared prepared for the likelihood her orders will be appealed by the state. “Let’s get this moving to the Court of Appeals, because that’s where you all are headed,” she said. She also ordered that a copy of her declaratory judgment be sent to President Barack Obama, saying he “bailed out Detroit” and may want to look into the pension issue.

She also had this great thing for the bench to say:

“It’s (The Bankruptcy) also not honoring the (United States) president, who took (Detroit’s auto companies) out of bankruptcy.”

I didn't know we had to Honor Presidents in such ways. President Obama also took Detroit's auto companies INTO BANKRUPTCY with bondholders getting a big fat zero.

reply to post by pavil


I think it will be overturned myself.....but I think she had to do it to show the Orr/Snyder team she did not appreciate being used....those five minutes again.

There is no good way for Detroit to have any hope of recovery without bankruptcy. It will go forward.
Although, I expect the unions to cause some delays next.

reply to post by pavil


If they axed their healthcare, that would be more than enough of a burden for these older retired workers who did nothing to bring out this disaster.
They worked for 30 or more years with an expectation and a promise of a certain income.
General retirees have already lost their cost of living for the last TWO years.....and have increased medical costs to pay.

Further, unlike bondholders, who take risk as part of who they are....retirees are not insured against loss.

reply to post by DontTreadOnMe


The pensioners are screwed, I feel bad that they put into a program with the expectations of them having all the Government said they would. Like I said, it's very rare for ANY pension plan to be fully funded, add on top of that mismanagement and outright criminality in running said pension fund and it doesn't look good. Nobody is willing to bail them out, it would set a precedent that would just cause more domino's to fall. The City for sure can't pay, the State and Federal Govt's show no desire to step in and cover.

It's not just a "Detroit Problem" when it comes to pensions:

It may sound arcane, but the stakes for the country run into the trillions of dollars. Depending on which side ultimately wins the argument, every state, city, county and school district may find out that, like Detroit, it has promised more to its retirees than it ever intended or disclosed. That does not mean all those places will declare bankruptcy, but many have more than likely promised their workers more than they can reasonably expect to deliver

Pension Gap

Looks like Wednesday is day one of the federal bankruptcy case:

Detroit will get its first day in bankruptcy court Wednesday as lawyers for Emergency Manager Kevyn Orr, the state of Michigan and the city’s pension funds wrangle over the legality of last week’s Chapter 9 filing.

U.S. Bankruptcy Court Judge Steven Rhodes said in an order Monday his court has the authority to halt a state court lawsuit brought by city retirees that the bankruptcy filing could jeopardize pension benefits in violation of the state constitution.

Orr’s legal team wants Rhodes to take over three state court lawsuits filed by retirees, current city workers and Detroit’s pension funds. At issue in the initial legal proceedings is whether $3.5 billion in unfunded pension liabilities can be slashed as part of an effort to pare down $18.5 billion in city debt.

www.detroitnews.com...

It's a rather long article...by Detroit paper standards...and more well-written than usual...

Originally posted by pavil
reply to post by DontTreadOnMe

 

The pensioners are screwed, I feel bad that they put into a program with the expectations of them having all the Government said they would. Like I said, it's very rare for ANY pension plan to be fully funded, add on top of that mismanagement and outright criminality in running said pension fund and it doesn't look good. Nobody is willing to bail them out, it would set a precedent that would just cause more domino's to fall. The City for sure can't pay, the State and Federal Govt's show no desire to step in and cover.

It's not just a "Detroit Problem" when it comes to pensions:

Agreed.

I think this is going to become a widespread issue. Pensions are completely unsustainable, due to many issues internal and external. Although pensions sound like a great idea, unless we have a totally responsible society, honest politicians, hard workers getting paid well for their work, maintaining a pension fund is almost impossible these days, and does not exist in the majority of the working force world.

If government officials think they can keep raising taxes to pay unsustainable pensions, than they better think again, because it's like getting blood from a stone these days, because people have barely enough to maintain their lifestyles.

Detroit is only the tip of the Iceberg we will see many more pension funds go under. People need to manage their own money for the future, this involve self-empowerment and responsibility.

I can't believe people still trust the government to manage their money.


How many lies, scandals, and corruption does it take before people realize this is not who I want managing my future?

reply to post by Realtruth


Pension reform is needed and fast.
Ther is no argument it is unsustainable and a unfair burden on taxpayers in many cities.

However, do we hang out to dry and severely hurt those least able to do anything about this mess? Surely, it isn't their fault.....and it is wrong to think the retirees had ANY say in how their money was invested...or stolen from them.....

I don't want to pick a fit with any union members....but there needs to be a wake up call that pensions are becoming a dinosaur....and they need to refocus on the needs of their members.

FWIW, last month, my electric bill had a one time charge for Edison pensions....so it's not just the public sector that needs reforming.

Originally posted by DontTreadOnMe
reply to post by Realtruth

 

Pension reform is needed and fast.
Ther is no argument it is unsustainable and a unfair burden on taxpayers in many cities.

However, do we hang out to dry and severely hurt those least able to do anything about this mess?

For a symbolic start, I think ANY elected official or appointed pension board members where Pensions become an issue should automatically lose THEIR pensions from said city. They were supposed to be the "stewards" of the pensions, they should not benefit from their own ineptness.

I know it's only a symbolic drop in the bucket, but at least it sends a message. Personally , I'd rather see legal actions against those individuals responsible for the mismanagement of Pensions, but that won't happen unless massive fraud happens.

Those Pension boards get wined, dined and put on vacations to "fact find" by the financial companies vying for their business.

I'm still amazed how is it possible for a city to file for a bankruptcy?

Now here's a gem....

The Detroit City Council has passed a 'resolution' that is calling for an investigation of George Zimmerman !!!



Any normal person would think they have better things to do.

I guess they are diverting too

What a joke.

The Detroit City Council on Tuesday unanimously passed a resolution calling for a federal investigation to see whether civil rights charges are warranted against George Zimmerman, who was acquitted July 13 of second-degree murder and manslaughter charges in the killing of Florida teen Trayvon Martin.

The resolution, sponsored by Councilwoman JoAnn Watson, sparked a discussion over the need for city leaders and others to focus more on violence in Detroit.
Detroit council supports calls for federal investigation of possible civil rights charges against George Zimmerman