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Detroit Bankruptcy Judge: Pension Ruling Was “Not Particularly Difficult” Decision

U.S. Bankruptcy Judge Steven Rhodes – the judge that authorized Detroit’s pension cuts as part of its bankruptcy plan – said this week that, from a legal standpoint, the decision to let the city cut pensions was “not particularly difficult”. But from a personal standpoint the cuts were more difficult, according to Rhodes. Here’s what Rhodes ...
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Illinois Gov. Rauner’s Municipal Bankruptcy Plan Faces Obstacles

Last week, Illinois Gov. Bruce Rauner suggested giving municipalities the power to file for bankruptcy as a way to tame pension debt. The idea is that even if towns and cities don’t follow through, the threat of bankruptcy could give them leverage in pension negotiations with workers. But the proposal, if it ever comes to fruition, will face legal ...
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Illinois Gov. Rauner Proposes Bankruptcy As Strategy for Taming Municipal Pension Debt

Illinois Gov. Bruce Rauner didn’t touch on pensions during his State of the State address this week. But in a list of policy proposals handed out to lawmakers, Rauner suggested giving municipalities the power to file for bankruptcy as a way to tame pension debt. Even if towns and cities didn’t act, the threat of bankruptcy could give them leverage ...
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Settling Pension Lawsuit Is Top Priority for Raimondo

When Rhode Island Governor-elect Gina Raimondo takes office this month, one of her top priorities will be negotiating a settlement with public employee unions in the lawsuit challenging the state’s 2011 pension changes. From the Providence Journal: Days away from taking the oath of office that will make her the first female governor of Rhode Island, ...
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Michigan’s $195 Million Payment to Detroit Pension Systems Approved

A board on Monday approved a $195 million payment that Michigan will make to Detroit’s pension system as part of the city’s plan to avoid steeper benefit cuts. From the Lansing State Journal: Detroit’s two pension funds are expected to receive the state’s “grand bargain” bankruptcy contribution of $194.8 million on Feb. 9 after a state ...
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Major Creditor Comes Out Against San Bernardino Bankruptcy Plan That Fully Pays CalPERS

A major creditor of bankrupt San Bernardino told Reuters Thursday that it would oppose a bankruptcy plan that mandates the city keep paying CalPERS in full. San Bernardino’s current plan doesn’t disrupt payments to CalPERS and keeps pensions intact. The creditor has not been identified. From Reuters: A major capital markets creditor of bankrupt ...
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California Attorney: Bankruptcy “Not a Practical or Desirable” Way To Cut Pensions

Teague Paterson, an attorney from Sacramento specializing in labor law, has penned a column in Monday’s Sacramento Bee in which he explains his position that bankruptcy is “not a practical or desirable” way to cut pension benefits. From the column: Imagine for a moment that you have run into deep financial trouble and have decided to ...
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Detroit Creditor Accuses “Agenda-Driven” Bankruptcy Mediators Of Favoring Pensioners

Another chapter has been written in the bitter fight between Detroit and one of its largest creditors, Syncora. The bond insurer has the city’s bankruptcy mediators of blatantly favoring pensioners while pushing most of the pain of the bankruptcy onto the city’s creditors. Syncora said in a court filing today that Detroit’s grand bargain deal ...
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Oral Arguments by Pension Funds and Unions Pushed Back in Detroit Bankruptcy Hearing

When Detroit first raised the issue of cutting pension benefits for the city’s workers, unions and pension funds balked at the idea. So when a Detroit bankruptcy court ruled that the city could indeed cut pension benefits as part of bankruptcy proceedings, several parties immediately filed appeals, including two public employee unions and one pension ...
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Could Detroit-Style Cuts Come to California?

Pension benefits, once thought safe, now stand on shakier footing than they ever have. Detroit’s citizens live in a state where pensions are protected by the Constitution, but that didn’t matter when a bankruptcy judge ruled that the city could cut worker pensions as part of its bankruptcy restructuring plan. California workers are now wondering ...
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