“If Governor Snyder and his EM wanted to protect retirees with low dollar pensions, they could have done so with an appropriate offer and good-faith negotiations before the bankruptcy proceedings were filed,” Sharon Levine, an attorney with Lowenstein Sandler LLP who represents the largest union for Detroit’s municipal employees, said in an e-mailed response to Orr’s remarks.
On Dec. 3, Detroit won the right to remain in bankruptcy while it prepares a so-called plan of adjustment to be presented to the federal judge overseeing the case. That plan may be released as early as the first week of January, unless the city and creditors are close enough to a deal to justify a delay for further talks.
Under the June proposal, about $12 billion in unsecured debt would be canceled and creditors would be given a $2 billion note that pays about 1.5 percent in interest. The $12 billion includes $3.5 billion owed to the city’s two pension systems, about $1.3 billion owed on pension obligation bonds and more than $5 billion needed to cover health care for retired city workers.
Pensioners have called the $3.5 billion figure inflated. more »