Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Silent victims in the Detroit bankruptcy filing
Author: Joel R. Glucksman
Date: May 9, 2014
Key Contacts
Back
As the city of Detroit nears a final decision in its bankruptcy case, its pension boards and retirees’ group have reached a tentative agreement that may help the city to get out of Chapter 9 by the end of the year, according to The New York Times. By emergency manager Kevyn Orr’s estimation, the city holds liabilities of approximately $18 billion, which it seeks to cut through the filing. Through the use of a so-called ‘cram down,’ Detroit does not need an agreement with all of its over 100,000 creditors. Instead, it can leverage an agreement with one class of impaired creditors to push other creditors into accepting the plan.
In a recent extended piece, Al Jazeera America examined some of the creditors who are left with little power to negotiate – tort creditors. These creditors are owed money based on the city’s civil wrongdoing, and can generally expect to receive just 20 percent of what they are owed by the city.
One such creditor is Jesse Payne, a woman who in 2012 was run over by a city bus, according to the news source. Her legs were “de-gloved,” leaving her without skin and a dire prognosis. Despite doctors’ expectations, she survived and retained her legs, but never received the $3.5 million owed to her in judgments and settlements after a drawn out case with the city. Another creditor is Dwayne Povience, who was wrongfully imprisoned for almost a decade on murder charges after police coerced a homeless man into testifying against him.
These creditors, of which there are over 500, are generally low income, and due to the differences between their cases have little hope of coordinating, Al Jazeera America explained. Though Orr declined to comment for the story, he did acknowledge that, “reaching a consensual resolution and getting someone to understand that they have to give up expectations … that’s a difficult call.”
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, 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
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Author: Matthew F. Mimnaugh
SPACs Are Back, What You Need to Know
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
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.