Skip to comments.Detroit Files For Bankruptcy (Retirees Outnumber Employees By Over 2 to 1), Judge Bars Pension Cuts
Posted on 07/18/2013 3:00:40 PM PDT by whitedog57
The City of Detroit filed for bankruptcy Thursday in federal court, trying to get out from under billions in debt. If approved it would be the largest city bankruptcy in U.S. history.
The filing was under what is called Chapter 9 of the U.S. code, which allows municipalities to restructure debt under bankruptcy protection. The bankruptcy filing begins a 30-to-90 day period during which the court will determine whether the city is eligible for Chapter 9 and how many creditors will want a piece of the citys limited resources. A city must be insolvent to seek Chapter 9 protection.
Detroit is near the statutory limits of its ability to tax. That power has been dragged down by a drop in the citys population, down 60 per cent from almost 2 million at the peak in the 1950s to just under 700,000. The led to a 40 per cent drop in tax revenues since 2000. The city has had to borrow money to meet its operating budget which has been slashed. With the City retiree pool currently outnumbering active employees by an over-2 to 1 margin and growing, the City must address pension and retiree!healthcare liabilities as part of any comprehensive restructuring. As discussed above in Section 3(b), the City and its advisors are currently evaluating ways to reduce these unfunded liabilities, which involves an evaluation of plan design and benefits offered, to identify potential cost savings.
Faced with the obvious solution of slashing pensions, a Michigan judge (Ingham County Circuit Court Judge Rosemarie E. Aquilina) temporarily barred the states governor and Detroits emergency manager from taking any action that would allow cuts in pension benefits for city retirees.
The Obama Administration quickly responded: We remain committed to continuing our strong partnership with Detroit as it works to recover and revitalize and maintain its status as one of Americas great cities, White House spokeswoman Amy Brundage says in e-mailed statement.
Do I smell a Federal bailout
“Faced with the obvious solution of slashing pensions, a Michigan judge (Ingham County Circuit Court Judge Rosemarie E. Aquilina) temporarily barred the states governor and Detroits emergency manager from taking any action that would allow cuts in pension benefits for city retirees. “
Ok, Judge Airhead. Do you have the money to pay for that stuff under that black skirt of yours?
How does a state judge think she has any say in how a federal bankruptcy action will be handled?
Detroit is broke because whites fled the city and took their tax money with them. And it all started with the radical “leadership” of corrupt democRAT Coleman Young.
Obama will bail out the Detroit pension recipients.
I certainly hope not. I’m getting a little tired of the statists and the employees of the statists’ instrument of power (the government) being protected and sheltered.
This "Tragedy of the Commons" crap spreading the pain of corruption and ineptitude can't go on.
Judges get pensions too.
They are going to be so surprised when they discover that you can't have government spend money and have it, too.
Conflicting reports: this article from 30 minutes says she was going to bar the emergency manager from filing for bankruptcy, but the petitioners were minutes too late.
Detroit can’t pay its bills, so a judge is going to require them to pay their bills before they can slash their budget?????
The greedy working class of America will have to do their part to support this wonderful city. There are a lot of beds that need feathering and a lot of back that need scratching. Unions need their money!
The whole point of bankruptcy is to get out of bad contracts. While I feel sorry for the retirees, their benefits are not sacrosanct and should not be preserved at the expense of taxpayers. A private company that goes bankrupt does just that. Municipal employees are not holier than thou.
Everyone must be responsible for his or herself. You cannot and should not depend upon the government or others to take care of you.
When will the federal government follow suit? The sooner the better. It’s time we all take our medicine, pick up the pieces, and build anew.
I’d suggest that it goes back well before 1967.
Detroit councilwoman to Obama: We voted for you, now bail us out
Give every retiree 40 acres and a mule.
The real political fight hasn’t begun, yet. Government employees will struggle in politics against their predecessors (pensioners) for the decreasing availability of debt/revenues, as the default process continues. That’s where the money is, although it will drastically decrease in value (recirculating debt without manufacturing production of real wealth).
Have fun. Enjoy the slide (unless you’re a government employee or pensioner). Gloat fast over having sent most of the real work for real men to foreign countries over the past few decades, because the situation won’t last long.
1) city government (Democrat-run, natch) overpromises on pensions and steals the taxpayers blind
2) said government declares bankruptcy
3) taxpayers across the country get stuck with the bill.
What we have here is another welfare program, which transfers the hard-earned money of working people, to the moochers in Detroit.
Orr must have gotten wind of what she wanted to do, and they jumped the gun on her to keep their options open...
Holy %h!+ Batman that was close and serious...
But if we don't protect our markets, that will eventually be every city. Even cities that avoided debt and didn't promise their employees crap will eventually be dropping basic services and turning out the lights.
The big O is not a dream? I beg to differ. He is a nightmare.
If Obama had a city.............................
> Obama will bail out the Detroit pension recipients.
I certainly hope not. Im getting a little tired of the statists and the employees of the statists instrument of power (the government) being protected and sheltered.
Funny how all the DemoRat strongholds are running out of money and going bankrupt while the conserative regions are staying solvent and thriving. Surely just a coincidence. Maybe there’s a lesson to be learned there...
Better yet. The city could use those old abandoned buildings to grow weed and poppies with solar powered black lights.............
all the black ones, anyway.
It's real funny, from an article linked to by the article I linked:
An attorney for the pension funds said he feels blindsided because he agreed to delay the emergency hearing five minutes at the request of attorneys for Gov. Rick Snyder. He was seeking a temporary restraining order to block the historic bankruptcy filing.Suckers!
During those five minutes, he said, attorneys filed in federal court in Detroit for Chapter 9 bankruptcy protection, which generally results in a stay in all other pending litigation involving the city.
Looks like they ran out of other people's money and it's very likely that the takers outnumber the makers by 10 to 1.
Who’s going to feed the ‘rats when there are only ‘rats left?
Obamacare’s death panels will deal with the overabundance of retirees quite effectively.
Pension gap divides public and private workers (2007 article but timely)
You can bet the politicians will be looking for ways to steal the 401k savings of the non-government retirees to fund the bloated benefits of the government retirees. The former group has nobody to defend them. The latter has politicians and unions feeding at the trough.
Read pensiontsunami.com regularly.
Its a compilation of news reports, mostly local or regional, about pension problems and abuses everywhere. Youll see what regular Joes are angry about.
But I thought Obama single handedly saved the Motor City.
BK is Federal The BK judge will overrule one way or another.
Labor corruption has deep and tenacious roots.
Sell off Miggy, I know a few teams that’ll buy him.
Along with Dole, McCain, Lindsey, Rubio, Christy, etc....
Great idea. All the people who voted for Obama can be tapped for the bailout. Leave the rest of us the heck alone.
Detroit has no tax base and no income to pay its pensioners. The State of Michigan won’t bail out Detroit and it’s unlikely that Feds can either. In other words, it’s time for Detroit to go into liquidation.
o pension cuts?
let the judge pay it
You will have the last word.
What about the division between workers, both public and private, and the Wall Street high rollers who gambled away 401ks and crashed the economy for all in 2008?
Youll see what regular Joes are angry about.
Regular Joes are upset about ordinary people facing financial hardship or ruin, whether they're public or private employees, business owners, blue collar or white collar, young or old, black or white. What's the point of trying to pit people against each other in a zero sum game? Adjustments and "haircuts" may need to be made, but they need to be in a spirit of necessity, not a spirit of malice.
Let the people of Detroit eat hope and change. They’ve let their city become a cesspool.
Obama gives out Obamaphones to whoever will take them. Next will be prayer rug distribution to whoever will take them - or be made to take them.
Cities have functioned as a gigantic payoff machine for rat voters. If they are allowed to sink under the waves as they deserve, the rat will have to swim. The Rat party will lose its utility to its little rat voters. Can’t see it being allowed to happen. We’ll see. The Feds have already become more and more the nursing mother. Maybe that maintains the status quo until the nation collapses.
Who really unchained Wall Street?
For all the bluster of Obama, pre- and post-2008, as well as that of Attorney General Eric Holder concerning the alleged criminal activities on Wall Street, there have been zero Wall Street prosecutions under Obama/Holder. Compare that with his predecessors Bush and Clinton:
GAI [Government Accountability Institute] details how the George W. Bush and Bill Clinton administrations both actually took down financial criminals - unlike the Obama administration. Between 2002 and 2008, for instance, GAI points out how a Bush administration task force “obtained over 1,300 corporate fraud convictions, including those of over 130 corporate vice presidents and over 200 CEOs and corporate presidents.”
“Clinton’s DOJ prosecuted over 1,800 S&L (savings and loans) executives, senior officials, and directors, and over 1,000 of them were sent to jail,” GAI adds. But, despite having “promised more of the same,” especially in the wake of the 2008 financial crisis, the Obama administration’s DOJ has not brought criminal charges against a single major Wall Street executive. The Bush and Clinton administrations’ track records on prosecuting white-collar crime, and the Obama administration’s failure to do so, Schweizer said, is “evidence that this has less to do with some sort of partisan or philosophical issue.”
Bush - 1,300 convictions;
Clinton - 1,000 convictions;
Obama - Zero attempts.
No One Will Charged With a Crime for the MF Global Collapse
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