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Economy
In reply to the discussion: Weekend Economists Examine the Root of All Evil: February 28-March 2, 2014 [View all]Demeter
(85,373 posts)71. U.S. 6th Circuit Court to consider Detroit bankruptcy eligibility appeal
http://www.freep.com/article/20140221/NEWS01/302210073/U-S-6th-Circuit-Court-consider-Detroit-bankruptcy-eligibility-appeal
The U.S. Sixth Circuit Court of Appeals has agreed to hear an appeal to Detroits eligibility for Chapter 9 bankruptcy. The court today agreed to accept a direct appeal, which means the case will bypass the U.S. District Court Eastern District of Michigan. The move could mark the cases first step on the way to the U.S. Supreme Court.
Several major creditors including the citys largest union, AFSCME Council 25, and the citys two pension funds filed appeals challenging Judge Steven Rhodes December order allowing the case to proceed. Detroits bankruptcy will proceed while the appeal is being heard, which will not take place on an expedited basis.
One of the most contentious issues in the case is whether the city should have promised not to cut pensions as a condition of filing for bankruptcy. The states Constitution bars public pension cuts, but Rhodes ruled that pensions are contracts that can be severed under federal bankruptcy law. To be eligible for bankruptcy, Detroit must prove its insolvent, obtain the states authority and show it has negotiated in good faith with creditors or that its not longer possible to do so.
The Sixth Circuits decision comes as the city today is expected to file its proposed bankruptcy restructuring plan, which is likely to included proposed cuts for pensioners.
2/21/2014
The U.S. Sixth Circuit Court of Appeals has agreed to hear an appeal to Detroits eligibility for Chapter 9 bankruptcy. The court today agreed to accept a direct appeal, which means the case will bypass the U.S. District Court Eastern District of Michigan. The move could mark the cases first step on the way to the U.S. Supreme Court.
Several major creditors including the citys largest union, AFSCME Council 25, and the citys two pension funds filed appeals challenging Judge Steven Rhodes December order allowing the case to proceed. Detroits bankruptcy will proceed while the appeal is being heard, which will not take place on an expedited basis.
One of the most contentious issues in the case is whether the city should have promised not to cut pensions as a condition of filing for bankruptcy. The states Constitution bars public pension cuts, but Rhodes ruled that pensions are contracts that can be severed under federal bankruptcy law. To be eligible for bankruptcy, Detroit must prove its insolvent, obtain the states authority and show it has negotiated in good faith with creditors or that its not longer possible to do so.
The Sixth Circuits decision comes as the city today is expected to file its proposed bankruptcy restructuring plan, which is likely to included proposed cuts for pensioners.
2/21/2014
Detroit Files Historic Bankruptcy Blueprint By Patrick J. Rizzo
http://www.nbcnews.com/business/economy/detroit-files-historic-bankruptcy-blueprint-n35511
Detroit revealed its historic plan to emerge from under $18 billion in debt Friday, laying the groundwork for whats expected to be a long, bitter battle with creditors, retirees and bondholders over the biggest municipal bankruptcy ever.
The 120-page 'plan of adjustment' could change radically as negotiations with more than 100,000 creditors move forward. It must still be approved by U.S. Bankruptcy Judge Steven Rhodes. According to The Associated Press, an early draft of the plan called for city pensioners to receive $4.3 billion in payments and bondholders about $1.1 billion during the next 40 years.
"The Plan of Adjustment that the City of Detroit filed with the U.S. Bankruptcy Court for the Eastern District of Michigan on February 21, 2014 represents a critical step toward the Citys rehabilitation and recovery from a decades-long downward spiral," the office of the city's emergency manager, Kevyn Orr, said in a statement.
A summary of the plan said it would devote $1.5 billion over 10 years to capital improvements, with up to a third of that aimed at blight removal. It also said it proposes paying general obligation creditors about 20 percent of what they are owed through the issuance of new bonds. If police and fire department retirees agree to the plan, they would receive about 90 percent of their pensions, after cutting cost of living allowances. General retirees would get about 70 percent....
http://www.nbcnews.com/business/economy/detroit-files-historic-bankruptcy-blueprint-n35511
Detroit revealed its historic plan to emerge from under $18 billion in debt Friday, laying the groundwork for whats expected to be a long, bitter battle with creditors, retirees and bondholders over the biggest municipal bankruptcy ever.
The 120-page 'plan of adjustment' could change radically as negotiations with more than 100,000 creditors move forward. It must still be approved by U.S. Bankruptcy Judge Steven Rhodes. According to The Associated Press, an early draft of the plan called for city pensioners to receive $4.3 billion in payments and bondholders about $1.1 billion during the next 40 years.
"The Plan of Adjustment that the City of Detroit filed with the U.S. Bankruptcy Court for the Eastern District of Michigan on February 21, 2014 represents a critical step toward the Citys rehabilitation and recovery from a decades-long downward spiral," the office of the city's emergency manager, Kevyn Orr, said in a statement.
A summary of the plan said it would devote $1.5 billion over 10 years to capital improvements, with up to a third of that aimed at blight removal. It also said it proposes paying general obligation creditors about 20 percent of what they are owed through the issuance of new bonds. If police and fire department retirees agree to the plan, they would receive about 90 percent of their pensions, after cutting cost of living allowances. General retirees would get about 70 percent....
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I'll give you all a chance to catch up, and let X and others handle posts for a bit!
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