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
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Author: Angela A. Turiano
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
Don’t Cash a “Paid in Full” Check Without Understanding the Legal Implications
Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]
Author: Dan Brecher
Changes to Qualified Small Business Stock Will Benefit Startup Founders and Investors
The One Big Beautiful Bill Act of 2025 (OBBBA) significantly impacts federal taxes, credits, and deductions. A key change relating to Qualified Small Business Stock (QSBS) allows greater tax-free gains for investments in startups and other qualifying small businesses. Company founders and other investors should understand how the enhanced tax strategy works or risk missing […]
Author: Dan Brecher
Corporate Consolidation and Antitrust Issues in Mergers
Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]
Author: Dan Brecher
What is Business Law and Why Is it Important?
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Author: Dan Brecher
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.