Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Pensions Could Be Saved in Detroit Bankruptcy
Author: Joel R. Glucksman
Date: January 24, 2014
Key Contacts
Back
In July 2013, the city of Detroit filed the largest case under Chapter 9 of the bankruptcy laws in the history of the United States. The case didn’t sit well with everyone. The administrators of the city’s pension funds have been steadfastly opposed to the bankruptcy, asserting that it put at risk the money of hard-working employees.
However, in a recent three-and-a-half hour discussion led by U.S. Chief District Judge Gerald Rosen, it appears as though a bargain has been reached to make all sides happy. According to the Detroit Free Press, Rosen announced that nine foundations had pledged $330 million which the debtor will be able to use to help keep the city’s pension funds liquid. This will be a positive step in Detroit’s struggle to restructure its municipal debt.
The funds are coming from supporters of the Detroit Institute of Arts, who are pledging the money so that the city can avoid having to put its extensive holdings, including Picassos and Van Goghs, up for auction to pay its debts. The plan is to have the money go to help retiree pensions, which otherwise might be underfunded by as much as $3.5 billion, according to Bloomberg.
“Today’s announcement offers hope that by working collaboratively, the city, its creditors and labor stakeholders can reach a negotiated solution that will resolve all claims and improve the services that are admittedly and critically necessary,” Kevyn Orr, the city’s emergency financial manager, told Bloomberg.
Orr added that the $330 million raised by donors is less than the $500 million he had hoped would be received, but it should be a step in the right direction to help reduce opposition to Detroit’s bankruptcy, and keep the proceedings moving forward. After the proposal was first reported, more donations came in, which could help reach the $500 million goal.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
When Are New Jersey Business Owners Personally Liable for Corporate Debt?
New Jersey personal guaranty liability is a critical issue for business owners who regularly sign contracts on behalf of their companies. A recent New Jersey Supreme Court decision provides valuable guidance on when a business owner can be held personally responsible for a company’s debt. Under the Court’s decision in Extech Building Materials, Inc. v. […]
Author: Charles H. Friedrich
Commercial Real Estate Trends to Watch in 2026
Commercial real estate trends in 2026 are being shaped by shifting economic conditions, technological innovation, and evolving tenant demands. As the market adjusts to changing interest rates, capital flows, and workplace models, investors, owners, tenants, and developers must understand how these trends are influencing opportunities and risk in the year ahead. Overall Outlook for Commercial […]
Author: Michael J. Willner
One Big Beautiful Bill: New Tip Income Tax Rules Employers & Workers Need to Know
Part 2 – Tips Excluded from Income Certain employees and independent contractors may be eligible to deduct tips from their income for tax years 2025 through 2028 under provisions included in the One Big Beautiful Bill. The deduction is capped at $25,000 per year and begins to phase out at $150,000 of modified adjusted gross […]
Author: Scott H. Novak
One Big Beautiful Bill: New Overtime Tax Rules Employers and Employees Need to Know
Part 1 – Overtime Pay and Income Tax Treatment Overview This Firm Insights post summarizes one provision of the “One Big Beautiful Bill” related to the tax treatment of overtime compensation and related employer wage reporting obligations. Overtime Pay and Employee Tax Treatment The Fair Labor Standards Act (FLSA) generally requires that overtime be paid […]
Author: Scott H. Novak
New York’s FAIR Business Practices Act: What the New Consumer Protection Measure Means for Your Business
In 2025, New York enacted one of the most consequential updates to its consumer protection framework in decades. The Fostering Affordability and Integrity through Reasonable Business Practices Act (FAIR Act) significantly expands the scope and strength of New York’s long-standing consumer protection statute, General Business Law § 349, and alters the compliance landscape for New York […]
Author: Dan Brecher
How to Reduce Legal Risk as Your New Jersey Business Grows in 2026
For many New Jersey businesses, growth is a primary objective for the New Year. However, it is important to recognize that growth involves both opportunity and risk. For example, business expansion often results in complex contracts, an increased workforce, new regulatory requirements, and heightened exposure to disputes. Without proactive planning, even routine growth can lead […]
Author: Ken Hollenbeck
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.