Joel R. Glucksman
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Two important votes are scheduled in the Detroit bankruptcy case, the results of which will influence how the city will exit the protection of its case under Chapter 9 of the bankruptcy law.
The City Council is set to vote on a resolution that would approve the transfer of Detroit’s assets in the Detroit Institute of Art to a charitable trust as part of the city’s “grand bargain,” according to Detroit Free Press. The council will also vote on the city budget proposed last month by emergency manager Kevyn Orr.
State lawmakers approved a $194.8 contribution to the grand bargain, which is an $816 million deal that ties together all of the loose ends of Orr’s restructuring plan, according to the news source. The council has the option to reject the resolution to support the grand bargain, at which point Orr would have to ask a state emergency loan board to approve the DIA assets transfer.
Meanwhile, Detroit retirees met May 5 in the first of a series of meetings to hear more about the city’s proposed bankruptcy restructuring plan. These meetings are ahead of a vote that the retirees will take on whether to accept or to reject that plan, The Detroit News reported. Members of the General Retirement System must cast their ballots to accept the plan or reject it. If they accept it, it would reduce their pensions by 4.5 percent and eliminate the cost of living adjustment. If the retirees reject the plan, they face a significantly steeper cut of 27 percent.
Some retired city workers planned to fight the agreement, while others told the news source that they would take the deal.
“I had my life plan,” Daniel Lopez, 66, told The Detroit News. “They’ve taken that away. I’ll fight the fight. I don’t want to cut my throat. I’ll roll the dice.”
Dinish Vyas, 69, told the news source that he would take the deal, even though he stands to lose $11,000 per year.
“It’s better having some money in your pocket than no money at all,” said Vyas.
If you have any questions about this post or would like to discuss your company’s creditors’ rights and bankruptcy matters , please contact me, Joel R. Glucksman at ScarinciHollenbeck.com.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, Bankruptcy Litigation
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