SAVE DETROIT’S OAKMAN ORTHOPEDIC SCHOOL FOR SPECIAL NEEDS CHILDREN

Oakman Orthopedic School parents, children and supporters protest planned closing outside DPS headquarters in Fisher Bldg. July 24, 2013. Photo by Maiyoua Vang

Oakman Orthopedic School parents, children and supporters protest planned closing outside DPS headquarters in Fisher Bldg. July 24, 2013. Photo by Maiyoua Vang

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WAR! RETIREES, WORKERS, RESIDENTS V. WALL STREET IN DETROIT BANKRUPTCY; JUDGE THROWS OUT STATE CLAIMS, SETS HEARING ON MOTION TO REPLACE PENSION BOARDS FOR AUG. 2

HEARING ON MOTION TO REPLACE PENSION BOARDS AUG. 2, 2013 10 AM

Judge Rhodes takes federal jurisdiction over broad range of issues

Represents national challenge to pension rights guaranteed by states

Firefighters, other retirees mobilizing to stop the attack

City services will NOT improve, despite contentions by Orr, Freep 

By Diane Bukowski 

July 28, 2013 

Detroit firefighters protest outside courthouse July 24. Photo: Paul Sancya, AP

Detroit firefighters protest outside courthouse July 24.
Photo: Paul Sancya, AP

DETROIT – Detroit firefighters and other city workers shouted out “This is war” in protests this week, after U.S. Bankruptcy Judge Steven Rhodes declared exclusive federal jurisdiction over actions related to their pensions and all matters connected to Detroit’s historic bankruptcy case, both present and future. The bankruptcy filing is the largest in the history of the U.S. 

Judge Rhodes’ sweeping order is significant particularly because it takes the issues out of Michigan’s state courts. The Michigan Constitution has strong provisions protecting public retiree pensions, whereas there are no such protections under federal statutes.

“It was argued today that perhaps the exclusive grant of jurisdiction to the Bankruptcy Court in Chapter 9 is unconstitutional,” Rhodes said during his ruling. “I find nothing in the 10th amendment or the more ambiguous concept of federalism to support that.  In all of the other recent Chapter 9 cases, the Bankruptcy Court determined eligibility. This is entirely consistent with the bankruptcy and supremacy clauses of the Constitution. There is nothing in Title 28 jurisdictional provisions that suggests that Congress intended for state courts to have jurisdiction.” 

U.S. Bankruptcy Court Judge Steven Rhodes with his book on Ponzi schemes.

U.S. Bankruptcy Court Judge Steven Rhodes with his book on Ponzi schemes.

The 1oth Amendment to the U.S. Constitution says, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.” 

His ruling as finalized reads in part, “Pursuant to section 105(a) of the Bankruptcy Code, the Chapter 9 Stay hereby is extended to apply in all respects (to the extent not otherwise applicable) to the State Entities (defined as the Governor, the State Treasurer and the members of the Loan Board, collectively with the State Treasurer and the Governor, and together with each entity’s staff, agents and representatives), the Non-Officer Employees and the City Agents and Representatives. 

“For the avoidance of doubt, each of the Prepetition Lawsuits hereby is stayed, pursuant to section 105(a) of the Bankruptcy Code, pending further order of this Court. 

“This order is entered without prejudice to the right of anycreditor to file a motion for relief from the stay imposed by this order using the procedures of and under the standards of 11 U.S.C. § 362(d)-(g).”

Judge Rhodes’ full court ruling is at DB Rhodes order 7 24 13.

(VOD will be publishing links to other court documents later.)

JUDGE RHODES GRANTS JONES DAY MOTIONS 

Heather Lennox leads Jones Day's victorious charge out of court July 24.. Beside her is Jones Day Attorney Stephen Heiman and in background at right is managing partner Stephen Brogan.

Heather Lennox leads Jones Day’s victorious charge out of court July 24.. Beside her is Jones Day Attorney David Heiman and in background at right is managing partner Stephen Brogan.

Judge Rhodes’ sweeping order completely granted “stay” and “extended stay” motions by the City of Detroit, as represented by Emergency Manager Kevyn Orr and the megalith, ultraconservative Jones Day law firm. Jones Day was hired after mass opposition from Detroit residents who said it represents most of the city’s corporate creditors in other matters. 

Jones Day has a team of five in town handling the bankruptcy and debt re-structuing, including its Managing Partner [i.e. CEO] Stephen Brogan. Attorney Heather Lennox argued their case July 24. 

Lennox, of their Cleveland office, according to the law firm’s website, is “a restructuring partner, has counseled manufacturing clients in various industries through bankruptcies involving significant changes (both negotiated and court-imposed) to collective bargaining agreements, retiree benefits, and pensions affecting various unions.” 

NATIONAL ATTACK ON PENSION RIGHTS 

Attorney Jerome  Goldberg of Moratorium Now Coalition speaks against banks at Detroit Financial Review Team meeting March 26, 2012/ Photo by Diane Bukowski

Attorney Jerome Goldberg of Moratorium Now Coalition speaks against banks at Detroit Financial Review Team meeting March 26, 2012/ Photo by Diane Bukowski

Attorney Jerome Goldberg of the Moratorium NOW! pointed out the national implications of  Judge Rhodes’ order. 

“Detroit is now in the forefront of what amounts to a national attack on the working class and pensions across the country orchestrated by the ruling class and banks who caused this crisis,” Attorney Jerome Goldberg of the Moratorium NOW! Coalition said, speaking outside Rhodes’ court July 24. 

“Twenty-four other states have constitutional protections of public pension benefits,” Goldberg explained. “Michigan’s law is among the best. If it is eviscerated here, this will be a signal to the other states. The real secured debts are the pensions, secured by the workers who sacrificed higher pay for them. The city’s debts to the banks must be cancelled. They have committed predatory lending both to homeowners resulting in massive foreclosures that have devastated Detroit, and to the city and other municipalities, out of greed for profits.” 

Protesters carry a sign outside the Levin Federal Courthouse in Detroit, Wednesday, July 24, 2013. .(AP Photo/Paul Sancya)

Protesters carry a sign outside the Levin Federal Courthouse in Detroit, Wednesday, July 24, 2013. .(AP Photo/Paul Sancya)

Most civilian city workers make less than $19,000 annually in pensions, said a union attorney during the hearing before Rhodes. For many, their pensions are reduced when they become eligible for Social Security. Detroit firefighters and police, however, don’t even pay into Social Security, so their pensions are their only source of income after retirement. 

FIREFIGHTERS PROTEST EN MASSE; THEY GET NO SOCIAL SECURITY 

Darrell Freeman, captain of Engine 59 and president of the Phoenix, the city’s Black firefighters association, spoke to VOD as dozens of firefighters, clad in red T-shirts declaring “Detroit Vs. Everybody,” joined with Moratorium NOW! outside Rhodes court.  The firefighters have been protesting daily outside the Coleman A. Young Center as well.  

Detroit Phoenix members/Facebook photo

Detroit Phoenix members/Facebook photo

“We don’t pay into the Social Security system,” Freeman said. “This is our primary job. Firefighting is the second most stressful job after being president. Our average life expectancy is 65. We are defending our pensions for our families. It is amazing to me that the courts are not being sympathetic to the fact that we have given our lives to the city and for the city. The whole state of Michigan voted against emergency manager laws—that should play a part in Judge Rhodes’ decision.” 

Freeman declared further, “They are clearly gangsters. They want to take everything we’ve earned over the years after approving Public Act 436 in the wee hours, in a lame duck session. For people not to see this is a travesty.  [Michigan Gov. Rick] Snyder’s plan all along was to combine our pension money into [the Michigan Employees Retirement Association]. Ours is outperforming pension funds there. He’s been after our money since he’s been in office.” 

Detroit EM Kevyn Orr with boss Gov. Rick Snyder at press conference July 19, 2013./Photo Diane Bukowski

Detroit EM Kevyn Orr with boss Gov. Rick Snyder at press conference July 19, 2013./Photo Diane Bukowski

PA 436 replaced PA 4, which Michigan voters overwhelmingly repealed Nov. 6, 2012. 

Orr later threatened the firefighters for claiming, as their pension fund’s actuary Gabriel, Roeder and Smith says, that the Detroit Police and Firefighters Retirement System (DPFRS) is 96 percent funded.  

The city earlier hired Milliman, Inc., as its pension “consultants.” It has declared in secret reports that funding levels for both the DPRFRS and the Detroit General Retirement System (DGRS) are far lower than their actuary says. 

In the bankruptcy proceedings, Orr has moved for the appointment of a “Retirees Committee” by Judge Rhodes to represent retirees, replacing the elected pension board trustees. A section of PA 436 says that if the city’s pension systems fall below an 80 percent funded level, Orr can remove any or all of the trustees and replace them. 

Rhodes has set a hearing on Orr’s motion, which would essentially replace the pension boards, for Friday, Aug. 2, 2013 at 10 A.M. in Room 100 of the Federal Courthouse at 231 W. Lafayette in downtown Detroit. (Click on DB 8 2 13 order for full text of his scheduling order for July 24 and August 2.)

PROTESTERS DEMAND BANKS PAY 

Detroit Health Department retiree Walter Knall protests outside the Coleman A. Young Center with dozens of others July 26.

Detroit Health Department retiree Walter Knall protests outside the Coleman A. Young Center with dozens of others July 26.

Along with the firefighters, Moratorium NOW!, with the newly formed “Stop the Theft of Our Pensions Committee,” brought retirees and their supporters by the dozens to protest outside the Federal courthouse building in downtown Detroit on July 24, and outside the city’s headquarters, the Coleman A. Young Center, on July 26. They declared “THIS IS WAR!” in their fliers. They also demanded total cancellation of the city’s debt to the banks, many of which have been charged and some convicted of predatory lending, mortgage fraud, and laundering drug money. 

Former UBS AG banker Peter Ghavami  leaves the Manhattan Federal Court in New York July 24, 2013 REUTERS Eduardo Munoz

Former UBS AG banker Peter Ghavami leaves the Manhattan Federal Court in New York July 24, 2013 REUTERS Eduardo Munoz

Orr has recognized a 2005-06 predatory $1.5 billion pension obligation certificate loan to the city from the global Swiss bank UBS AG as a chief factor in the debt crisis. On top of numerous other global charges and convictions against UBS AG related to fraud and interest-rate rigging, three former UBS executives were sentenced to prison July 24 in a New York Court “for deceiving U.S. municipalities by rigging bids to invest municipal bond proceeds,” according to Reuters. 

U.S. District Court Judge Harold Baer of New York on July 25 blamed another Detroit creditor, Morgan Stanley, for the devastation of Detroit’s neighborhoods in a lawsuit brought on behalf of African-American homeowners,, according to Reuters’ blog author Allison Frankel.

U.S. District Court Judge Harold Baer of the Southern District of New York.

U.S. District Court Judge Harold Baer of the Southern District of New York.

“Judge Baer . . . . rejected all of the bank’s arguments for dismissing the homeowners’ Fair Housing Act claims, giving a stamp of judicial approval to the plaintiffs’ theory that ‘by creating the conditions under which New Century originated toxic loans, Morgan Stanley caused African-American borrowers to fall prey to those loans at a disproportionate rate, or put another way, to make this homeowner nightmare come true,'” Frankel wrote.

“In fact, Baer tied Morgan Stanley – which he described as “this alleged icon of the free enterprise system” – to Detroit’s economic downfall. Citing the complaint’s argument that New Century mortgages to African-Americans that were subsequently purchased by Morgan Stanley suffered unusually high foreclosure rates, Baer said that the city’s bankruptcy filing ‘only emphasizes the broader consequences of predatory lending and the foreclosures that inevitably result.’”

WILL ORDER STAY CHALLENGE TO CONSTITUTIONALITY OF PA 436? 

Former Council member Gary Brown, now Chief Compliance Officer under Kevyn Orr, applauds Detroit Mayor Dave Bing. At right is former Council Pres. Charles Pugh, who has disappeared after an alleged sex scandal.

Former Council member Gary Brown, now Chief Compliance Officer under Kevyn Orr, applauds Detroit Mayor Dave Bing. At right is former Council Pres. Charles Pugh, who has disappeared after an alleged sex scandal.

Rhodes’ order stayed all current and future proceedings, financial and otherwise, against the city, and its officers and employees, including Mayor Dave Bing and heads of the Finance and Budget Departments, and Chief Compliance Officer Gary Brown. As part of a stay extension, it barred legal proceedings against Michigan Gov. Rick Snyder, State Treasurer Andy Dillon, and the state’s Emergency Loan Board, related in any way to the bankruptcy case. 

Judge Rhodes specifically recognized Orr as a city officer, although he was appointed by Snyder. 

The stay permanently quashed three retirees’ state lawsuits which contended that Snyder has no authority under the State Constitution to approve a city bankruptcy filing without exempting pension benefits from consideration. 

Attorney Herb Sanders represents plaintiffs in Phillips v. Snyder.

Attorney Herb Sanders represents plaintiffs in Phillips v. Snyder.

Judge Rhodes said he would “tweak” the order proposed by Jones Day with regard to various matters, but his order only adds, “This order is entered without prejudice to the right of any creditor to file a motion for relief from the stay imposed by this order using the procedures of and under the standards of 11 U.S.C. § 362(d)-(g).”

It is unclear whether Rhodes’ order will stay proceedings in other federal courts, including two lawsuits, Phillips et al v. Snyder et al, and that claim Michigan’s Public Act 436, under which Orr operates, is unconstitutional. A hearing on Phillips et al is set for September 13 before U.S District Court Judge Graham Steeh’s court. His clerk said they have had no order from Rhodes staying the action as of yet.

Attorney Herbert Sanders, one of the attorneys in Phillips v. Snyder, told Rhodes, “There has already been a motion for summary judgment, and arguments have been scheduled. It appears that the city seeking an extension of the stay regarding finances, but pursuant to oral litigation they are seeking relief concerning any litigation that might interfere with city’s rights as a Chapter 9 debtor. Our case should not be included as part of the stay order. It is imperative the issue in our case should be determined before bankruptcy proceedings.”

FEDERAL LAWSUITS V. POLICE, CONSENT DECREE AFFECTED?

Nathaniel Brent, a pro se federal litigant, questioned during the hearing whether Rhodes’ order will stay federal lawsuits against Detroit police officers accused of violating federal constitutional protections of citizens. 

Police siege similar to that in which children of Nathaniel Brent were kidnapped.

Police siege similar to that in which children of Nathaniel Brent were kidnapped.

Brent’s five children were seized by Detroit police without judicial review. They were working with Child Protective Services worker Mia Wenk, who initiated the similar seizure of Maryanne Godboldo’s daughter in a case that has become a world-wide cause celebré. 

Brent regained custody of his children later after filing pro se.

“I have a claim against City of Detroit police officers for violation of my Fourth Amendment rights, which has been pending for the last two and one-half years,” Brent said. “Now issues of their liability cannot be litigated, although they should continue to be litigated.  My case is not part of the City of Detroit restructuring issues. The city has a risk management fund required to have at least $20 million.” 

Detroit bankruptcy has stayed payment of $5 million to Dwayne Provience, who spent 10 years in prison as a result of a wrongful conviction.

Detroit bankruptcy has stayed payment of $5 million to Dwayne Provience, who spent 10 years in prison as a result of a wrongful conviction.

He also questioned whether the stay should be extended to city employees who are not indemnified for their actions. 

Also see following article on bankruptcy stay put on city’s  $5 million settlement with a wrongly convicted man, Dwayne Provience, who spent ten years in prison. Provience is a father of three who now works a $9 an hour job. He sued a Detroit Police Sergeant and the city itself for wrongful arrest; a mediator recommended the $5 million settlement, which the city rejected. Case is still in progress. http://www.detroitnews.com/article/20130730/METRO01/307300023?fb_action_ids=10200295010165974&fb_action_types=og.recommends&fb_source=aggregation&fb_aggregation_id=288381481237582

Since the city pays millions a month to a federal monitor  under a police consent decree, it is unclear whether it will stay further action on that in U.S. District Judge Julian Abele Cook’s courtroom. 

ATTORNEYS FOR PENSION FUNDS, UNIONS OPPOSED ORDER 

Representing AFSCME Council 25, the union for the majority of city workers, Attorney Sharon Levine argued against Rhodes’ grant of complete federal jurisdiction, referring to state constitutional protections of pension rights.  

AFSCME Council 24's attorney Sharon Levine speaks with news media after hearing July 24. (Photo by Bill Pugliano/Getty

AFSCME Council 24’s attorney Sharon Levine speaks with news media after hearing July 24.
(Photo by Bill Pugliano/Getty

“The state has not properly in fact authorized a Chapter 9 bankruptcy,” Levine said. “If chapter 9 is being used to avoid the state constitution, you are taking away fundamental constitutional rights. The state’s interests are to go after the pensions.” 

She argued that state courts, where the retiree lawsuits were pending, are courts of primary jurisdiction under the U.S. constitution, while federal courts are of secondary jurisdiction. 

“The people of Detroit have very, very fundamental rights to go to their state courts first,” Levine said. “The Federal Rules of Civil Procedure protect the parties and provide due process. Most of our members are at or below 19,000 a year in their pensions. Unlike the corporations, they have no safety net.” 

Attorneys for the city’s pension funds and the United Autoworkers agreed with Levine. 

Atty. William Wertheimer represented UAW, retirees in  Flowers case.

Atty. William Wertheimer represented UAW, retirees in Flowers case.

“The Michigan State Constitution provides protection for accrued pension benefits,” Robert Gordon of Clark Hill, representing the pension funds, said. “The Governor cannot unilaterally abrogate the constitution. He is seeking to do indirectly what he can’t do directly.”

William Wertheimer, representing the UAW and plaintiffs in the Flowers case, one of the three retiree lawsuits, added, “Whether the state authorization violates the state constitution is totally a state issue. State courts already have jurisdiction. The Governor’s failure to except pension benefits violates state law.” 

Ironically, Attorney Barbara Paddock, representing the Detroit Firefighters Association, the Detroit Police Command Officers Association, The Detroit Police Lieutenants and Sergeants Association, and the Detroit Police Officers Association, concurred with Jones Day’s arguments and even took them a step further to ask the judge to make “an affirmative rule of preliminary injunction,” which he later did. 

“We are not conceding the city is eligible to be a debtor,” Paddock said. “We simply believe this court is the proper forum because of the interaction of state and federal law. We want the stay to include members of public safety unions who may be subjected to lawsuits.” 

RHODES SAYS MAJOR ISSUES WILL BE ARGUED IN HIS COURT ONLY

Someone painted "Bankruptcy" on wall of building on Grand River near I-75. The letters are in black, green and red, colors of the Black nation.

Someone painted “Bankruptcy” on wall of building on Grand River near I-75. The letters are in black, green and red, colors of the Black nation.

In his court discussion, Rhodes said he was that day making “no ruling whatsoever as to whether city is eligible to be a debtor under Ch9, . . . whether the state constitution prohibited the Emergency Manager appointment and prohibited the governor from authorizing CH 9 filing without excepting constitutionally protected pension rights . . . whether state orders should be given preclusive effect. . . .whether any order entered by state court after Ch 9 filing violated the stay [and] . . .whether C of D is proposing a feasible plan in light of State Constitution.”

Rhodes added, “Whether it serves the public interest is the most important factor of all. Granting this motion will enhance debtor’s likelihood of reorganization, create efficiency, expedite, reduce city’s costs as well as those of other parties. Court finds it is in the public interest.” 

He asserted, “All issues are fully preserved, when and if raised in an appropriate way. The Court will rule on them at that time. We will address procedures in a status conference Aug. 2.” 

Rhodes was appointed to the bench during Ronald Reagan's presidency.

Rhodes was appointed to the bench during Ronald Reagan’s presidency.

It is not clear how Rhodes will rule on these matters. He has only presided over one other Chapter 9 case, which a press representative said he thought involved a utility. Rhodes was appointed to the court in 1986 while Ronald Reagan was president.

A Michigan Lawyers Weekley blog reported in 2007, “On a dour note, Rhodes said Chapter 7 debtors need to be more forthcoming about disclosing administered assets. Thirty-seven percent are not “fessing up” to all that they have.

Rhodes said proposed amendments to the court’s local rules, if adopted, will give trustees and the U.S. Attorney’s Office more muscle power to enforce asset disclosure rules.

“'[O]ne of our new proposed local rules would require the trustee to file a report whenever the trustee discovers an undisclosed asset after the debtor testifies at the meeting of creditors that the schedules are accurate. Another … would require the debtor to provide additional documents at the meeting of creditors,’ Rhodes explained.”

Chapter 7 is primarily used by small debtors, not corporations.

BANKRUPTCY WILL NOT IMPROVE CITY SERVICES 

Cecily McClellan speaks in Benton Harbor in 2011 after EM takeover there.

Cecily McClellan speaks in Benton Harbor in 2011 after EM takeover there.

Cecily McClellan, a retired city worker who is Vice-President of the Association of Professional and Technical Employees (APTE) said, “It appears to me that Rhodes is being taken in regarding arguments on the public good. Local propaganda about deficiencies in street lighting, quality of life, police protection, does not recognize that much of this was manufactured in order to reach this point. For example, DTE has a $154 million contract to provide energy for the city instead of using the Public Lighting Department.  The new Public Lighting Authority wants to issue bonds backed by city for $160 million, in a move orchestrated by DTE.” 

McClellan earlier fought the city’s de-commissioning and privatization of three predominantly federally-funded departments as part of the PA4 consent decree. They were Health and Wellness Promotion, Human Services, and Workforce Development. Along with workers in Public Lighting, who are being laid off to make way for the Authority, most of the city workers in those departments lost their jobs, further diminishing Detroit’s tax base, and services to city residents were thrown into chaos or eliminated. 

Detroit Wastewater Treatment Plant worker on strike Sept. 30, 2012.

Detroit Wastewater Treatment Plant worker on strike Sept. 30, 2012.

Orr has said he is using the consent agreement as a blueprint for his future plans for Detroit, which he published earlier. His proposal to creditors, which he says will be the basis for the city’s plan of adjustment in bankruptcy, also follows those earlier pacts.

They include the regionalization of Detroit’s Water and Sewerage Department and the lay-off of 81 percent of its workforce under a contract with Toronto-based EMA, which union officials have said will lead to higher rates for Detroit residents. 

A state Belle Isle long-term “lease” with no lease payments is also on the agenda, with the attendant elimination of city jobs and current contractors, and the takeover of federal funds which continue to flow to the city to improve the Island, as well as revenues from events and permits. 

The Detroit Free Press published a front page interview with Orr July 28, with a banner headline declaring, “Detroit bankruptcy upside: City services will improve.”

It played on residents’ fear of crime. Orr said he plans to provide more police cars, tasers, and even on-body cameras for cops to fight what he portrayed as Detroit’s primary problem: small-scale criminals on the streets.

“The Taser issue illustrates one of the complications Orr’s team faces in improving police service,” said Freep writer Matt Helms in the article. “The city has been under federal oversight for a decade, and the U.S. Justice Department must approve any changes in the Police Department’s policies on use of force. Tasers, which use electricity to temporarily disable suspects, must win federal approval, something top aides to Orr say they believe will be granted because the devices help reduce shootings by officers.” 

The city pays millions a month to the federal overseer of the consent decree. Under the stay, those payments should be halted for the time being. 

Kelly Thomas died from his injuries after Fullerton, CA police tasered and beat him.

Kelly Thomas died from his injuries after Fullerton, CA police tasered and beat him.

There was a huge outcry during the last decade against the use of tasers in Detroit, which have been shown nationally to cause hundreds of deaths. Opponents said they have their origins in the 19th Century Afrikaaner concept that people of African descent are sub-human, with extraordinary animal strength that must be subdued by extraordinary measures. The website “Electronic Village” reported two days ago that there have been 541 taser deaths in the U.S. since 2001.

Helms said funding for police improvements will come from $11 million annually which he claimed was released by Judge Rhodes stay. Orr recently sued city creditor Syncora, Inc., which insures U.S. Bank NA’s holding of the city’s casino tax revenues pursuant to its 2009 default on the UBS $1.5 billion pension obligation certificates loan. UBS and US Bank agreed to release the funds, but Syncora balked. 

Hearing on D-DOT route cuts two years ago.

Hearing on D-DOT route cuts two years ago.

Rhodes told representatives of Syncora in court July 24 that their claims will be discussed in a status conference Aug. 2, so those funds are actually still pending for an indefinite period. 

The article said further that plans are being laid to hire ANOTHER private contractor to run D-DOT, in the wake of the disastrous performance of  Envisurage/Transpro, which led to drastically impaired bus service. Under the new Regional Transit Authority authorized by the state legislature, Detroit has already lost $7.8 million a year in federal funds for D-DOT, which are its primary support. Plans are being laid to subsume D-DOT and SMART into that authority. 

STATE AG SCHUETTE TO INTERVENE FOR PENSION RIGHTS

State Attorney General Bill Schuette announced in a release July 25 that he would intervene in the bankruptcy case to protect public pension funds under the state constitution.

Michigan AG Bill Schuette

Michigan AG Bill Schuette

Schuette said the constitution makes it “crystal clear in stating that pension obligations may not be ‘diminished or impaired,’” and said Michigan cannot afford to have the standard of living for its people including its retirees further compromised.

He cited the same constitutional provisions Wayne County Circuit Court Judge Rosemarie Aquilina used to bar Snyder from approving Detroit’s bankrujptfy filing in the three state lawsuits.

Schuette, however, opposed her rulings. He previously called for the Michigan Supreme Court to immediately rule on the constitutionality of PA 436, and earlier in his tenure apposed affirmative action in U.S. Supreme Court proceedings, as well as relief from life without parole for juvenile offenders.

However, Schuette may be making note of provisions in PA 436 itself that actually require the governor and the EM to abide by state constitutional protections of pensions.

A brief filed by the city’s pension funds in their state lawsuit says, “It is clear that Michigan’s legislators never intended that the governor or an emergency financial manager take action in violation of Art IX Sec. 24 [protecting pension benefits]. Indeed MCL 141.1552(m)(ii) [in PA 436] expressly provides that “[t]he emergency manager shall fully comply with . . . . section 24 of article IX of the state constitution of 1963. And MCL 38.1683 provides that “[t]he right of a member or retirant of a retirement system to a retirement benefit shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law and shall be unassignable.”

Video below is by Tommy Walker, creator of “Detroit Vs. Everybody” t-shirts worn by firefighters and others July 24. Information about his enterprise is at http://voiceofdetroit.net/2012/09/14/detroit-vs-everybody/’

 TO CONTACT RETIREES’ COMMITTEE THAT HELD PROTEST AT CAYMC JULY 26, CALL 313-680-5508 OR GO TO THEIR WEBSITE AT WWW.MORATORIUM-MI.ORG . They hold meetings every Monday at 7 p.m. at 5920 Second Ave. Detroit, MI  48202, near Wayne State University.

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4 IN 5 AMERICANS LIVE IN DANGER OF FALLING INTO POVERTY, JOBLESSNESS

Detroit residents fill out applications at job fair in 2010/AP photo

Detroit residents fill out applications at job fair in 2010/AP photo

90 percent rate among people of color, but white poverty rate increasing

 By The Associated Press

Published by NBCNews.com

 July 29, 2013

Four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.

Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend.

Family in Detroit waits for help finding housing. Detroit, which is 86 percent Black, has the highest poverty rate in the country.

Family in Detroit waits for help finding housing. Detroit, which is 86 percent Black, has the highest poverty rate in the country.

The findings come as President Barack Obama tries to renew his administration’s emphasis on the economy, saying in recent speeches that his highest priority is to “rebuild ladders of opportunity” and reverse income inequality.

As nonwhites approach a numerical majority in the U.S., one question is how public programs to lift the disadvantaged should be best focused — on the affirmative action that historically has tried to eliminate the racial barriers seen as the major impediment to economic equality, or simply on improving socioeconomic status for all, regardless of race.

Sheila Crowell helps community members plant trees at what was formerly Dingeman Playfield in a mixed-race neighborhood on Detroit's near west side. Since then, adjacent Chadsey High School, a renowned mutti-ethnic institution, has been closed and the playfield taken over by the city. Poverty and crime increase in Crowell's neighborhood.

Sheila Crowell helps community members plant trees at what was formerly Dingeman Playfield in a mixed-race neighborhood on Detroit’s near west side. Since then, adjacent Chadsey High School, a renowned mutti-ethnic institution, has been closed and the playfield taken over by the city. Poverty and crime increase in Crowell’s neighborhood.

Hardship is particularly growing among whites, based on several measures. Pessimism among that racial group about their families’ economic futures has climbed to the highest point since at least 1987. In the most recent AP-GfK poll, 63 percent of whites called the economy “poor.”

“I think it’s going to get worse,” said Irene Salyers, 52, of Buchanan County, Va., a declining coal region in Appalachia. Married and divorced three times, Salyers now helps run a fruit and vegetable stand with her boyfriend but it doesn’t generate much income. They live mostly off government disability checks.

“If you do try to go apply for a job, they’re not hiring people, and they’re not paying that much to even go to work,” she said. Children, she said, have “nothing better to do than to get on drugs.”

While racial and ethnic minorities are more likely to live in poverty, race disparities in the poverty rate have narrowed substantially since the 1970s, census data show. Economic insecurity among whites also is more pervasive than is shown in the government’s poverty data, engulfing more than 76 percent of white adults by the time they turn 60, according to a new economic gauge being published next year by the Oxford University Press.

Number of  white female-headed families now equals the same in the Black community.

Number of white female-headed families now equals the same in the Black community.

The gauge defines “economic insecurity” as a year or more of periodic joblessness, reliance on government aid such as food stamps or income below 150 percent of the poverty line. Measured across all races, the risk of economic insecurity rises to 79 percent.

Marriage rates are in decline across all races, and the number of white mother-headed households living in poverty has risen to the level of black ones.

“It’s time that America comes to understand that many of the nation’s biggest disparities, from education and life expectancy to poverty, are increasingly due to economic class position,” said William Julius Wilson, a Harvard professor who specializes in race and poverty. He noted that despite continuing economic difficulties, minorities have more optimism about the future after Obama’s election, while struggling whites do not.

“There is the real possibility that white alienation will increase if steps are not taken to highlight and address inequality on a broad front,” Wilson said.

Nationwide, the count of America’s poor remains stuck at a record number: 46.2 million, or 15 percent of the population, due in part to lingering high unemployment following the recession. While poverty rates for blacks and Hispanics are nearly three times higher, by absolute numbers the predominant face of the poor is white.

Man in B uchanan County, VA.

Man in B uchanan County, VA.

More than 19 million whites fall below the poverty line of $23,021 for a family of four, accounting for more than 41 percent of the nation’s destitute, nearly double the number of poor blacks.

Sometimes termed “the invisible poor” by demographers, lower-income whites generally are dispersed in suburbs as well as small rural towns, where more than 60 percent of the poor are white. Concentrated in Appalachia in the East, they are numerous in the industrial Midwest and spread across America’s heartland, from Missouri, Arkansas and Oklahoma up through the Great Plains.

Buchanan County in southwest Virginia is among the nation’s most destitute based on median income, with poverty hovering at 24 percent. The county is mostly white, as are 99 percent of its poor.

Food bank line in Oswego, New York.

Food bank line in Oswego, New York.

More than 90 percent of Buchanan County’s inhabitants are working-class whites who lack a college degree. Higher education long has been seen there as nonessential to land a job because well-paying mining and related jobs were once in plentiful supply. These days many residents get by on odd jobs and government checks.

Salyers’ daughter, Renee Adams, 28, who grew up in the region, has two children. A jobless single mother, she relies on her live-in boyfriend’s disability checks to get by. Salyers says it was tough raising her own children as it is for her daughter now, and doesn’t even try to speculate what awaits her grandchildren, ages 4 and 5.

Smoking a cigarette in front of the produce stand, Adams later expresses a wish that employers will look past her conviction a few years ago for distributing prescription painkillers, so she can get a job and have money to “buy the kids everything they need.”

“It’s pretty hard,” she said. “Once the bills are paid, we might have $10 to our name.” Continue reading

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‘DEMOCRACY NOW’ INTERVIEWS ON TRAYVON MARTIN MURDER: JUROR ‘MADDY,’ MICHELLE ALEXANDER, CORNEL WEST; SANFORD, FLA PROTEST

Juror B29 Says Zimmerman “Got Away with Murder,” Intensifying Scrutiny of Prosecution & Florida Laws

DEMOCRACY NOW

July 26, 2013

Juror B-29: Maddy

Juror B-29: Maddy

The only person of color on the all-female jury that voted to acquit George Zimmerman expressed anguish over trial’s outcome in her first interview since the trial. Speaking to ABC, the 36-year-old mother of eight who is of Puerto Rican descent said she believes Zimmerman “got away with murder” for killing Trayvon Martin, and claimed she shares the grief of his mother. Identifying herself only by her first name, “Maddy,” the juror explained her “not guilty” vote by saying the “Stand Your Ground” law was in conflict with her heart, forcing her to let Zimmerman walk free despite believing he was culpable. “It is hurtful as a lawyer for someone to say ‘I fought until the end,'” says Seema Iyer, an attorney specializing in constitutional, criminal and civil rights law who followed the Zimmerman trial closely. “No, she didn’t — if she had fought until the end, we would’ve had a hung jury.”

Full transcript of interview at Democracy Now interview with Juror 29 transcript.

MICHELLE ALEXANDER: “Zimmerman Mindset” Endangers Young Black Lives with Poverty, Prison & Murder

Michelle Alexander, Author of "The New Jim Crow."

Michelle Alexander, Author of “The New Jim Crow.”

“Justice for Trayvon” protests are planned in more than 100 cities this weekend as activists seek federal charges against George Zimmerman and the repeal of “Stand Your Ground” laws in Florida and dozens of other states. We speak with Michelle Alexander, a law professor at Ohio State University and author of the best-selling book, “The New Jim Crow: Mass Incarceration in the Age of Colorblindness.” Alexander says the biases that led to Martin’s death and let his killer go free are deeply embedded in U.S. society and in the criminal justice system itself: “The [Zimmerman mindset] that views black men and boys as a perpetual problem to be dealt with has infected our criminal justice system, infected our schools, has infected our politics in ways that have had disastrous consequences, birthing a prison system unprecedented in world history, and stripping millions of people of basic civil and human rights once they have been branded criminals and felons. It’s this mindset that some of us, defined largely by race and class, are unworthy of our basic care and concern and can be dealt with harshly, written off with impunity.”

Transcript of Democracy Now Michelle Alexander interview

Cornel West: Obama’s Response to Trayvon Martin Case Belies Failure to Challenge “New Jim Crow”

President Barack Obama speaking on Trayvon Martin case.

President Barack Obama speaking on Trayvon Martin case.

For a response to President Obama’s comments on the acquittal of George Zimmerman and racism in the United States, we’re joined by Dr. Cornel West, professor at Union Theological Seminary and author of numerous books. On Obama’s remarks comparing himself to Trayvon Martin, West says: “Will that identification hide and conceal the fact there’s a criminal justice system in place that has nearly destroyed two generations of precious, poor black and brown brothers? [Obama] hasn’t said a word until now — five years in office and can’t say a word about a ‘new Jim Crow.’ … Obama and [Attorney General Eric] Holder — will they come through at the federal level for Trayvon Martin? We hope so — [but] don’t hold your breath. There’s going to be many people who say, ‘We see this president is not serious about the criminalizing of poor people.'”

Transcript of Democracy Now interview with Cornel West

Sanford Justice for Trayvon march

Published on Jul 22, 2013

(Video sent to VOD by Kenny Snodgrass)

Trayvon Martin with dad Tracy Martin.

Trayvon Martin with dad Tracy Martin.

The people of Sanford, FL marched for justice in the name of Trayvon along with cities across the country.

The Dream Defenders are calling on Floridians to call Gov. Rick Scott’s office @ 850.488.7146 and leave a message with these 2 demands:

1. Call for Special Session & look at the Trayvon Martin Civil Bill of Rights.

2. We demand our Floridians’ lives be valued NOW!

Trayvon rallies 100 cities

Trayvon Martin rallies took place in 101 cities across the country July 22.

DETROIT YOUTH SELL BEAUTIFUL TRAYVON MARTIN T-SHIRTS

Detroit T-shirts use this image, only in red and white on black, and declare "Justice for Trayvon Martin."

Detroit T-shirts use this image, only in red and white on black, and declare “Justice for Trayvon Martin.”

VOD spotted several Detroit youth selling “Justice for Trayvon Martin” T-shirts at 7 Mile and Greenfield July 26, for only $10. The high-quality T-shirts are black with a red and white Trayvon Martin photo on the front, which declares “Justice for Travyon Martin.” On the back is the slogan: “We are all Trayvon! The Whole Damn System is Guilty!” with a silhouette of Trayvon in a hoodie in gray and white. If anyone knows how to contact the youth selling these shirts, please let VOD know. I wish I had stopped and gotten their contact information. Whether it was their own enterprise or part of a larger Trayvon Martin effort, they are to be commended for transmitting the message at prices our youth can afford.

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AIYANA’S KILLER WEEKLEY WALKS AGAIN; JUDGE GIVES ‘FIRST 48’ PRODUCER KID GLOVE TREATMENT

 

Aiyana Jones, murdered by Detroit cop Joseph Weekley; at right, her mother Dominika Jones reacts to hung jury verdict in Weekley trial.

Aiyana Jones, murdered by Detroit cop Joseph Weekley; at right, her mother Dominika Jones reacts to hung jury verdict in Weekley trial.

 During hearing days after Aiyana’s birthday, Weekley pre-trial rescheduled to Aug. 21, with trial “before end of year”

Commander who authorized raid on Aiyana’s home fired for “sexting” photo of genitals to female cop

Hathaway sympathizes with Howard, who filmed police raid that killed 7-year-old child 

Dominika at her daughter's graveside during July 20th 11th birthday family commemoration.

Dominika at her daughter’s graveside during July 20th 11th birthday family commemoration.

By Diane Bukowski 

July 26, 2013 

DETROIT – Wayne County District Court Judge Cynthia Gray Hathaway on July 25 adjourned a pre-trial hearing for Detroit police officer Joseph Weekley, who shot 7-year-old Aiyana Jones to death three years ago, to Aug. 21 this year. She claimed she has a full schedule and hopes Weekley’s re-trial will happen by the end of the year. 

Weekley’s first trial ended in a hung jury in June.

“This is not fair.” Aiyana ’s mother Dominika Jones, who was in the courtroom, said.  “It’s been too long since he killed Aiyana. It means his trial will happen after Thanksgiving or Christmas, while he celebrates the holidays with his daughters.” 

DPD Inspector Don Johnson testifies during Weekley's first trial.

DPD Inspector Don Johnson testifies during Weekley’s first trial.

Weekley has been free on personal bond since killing Aiyana, while her father and her aunt’s former fiancé languish in jail on first-degree murder charges in the death of Je’Rean Blake. Hathaway, apparently in direct collusion with both Wayne County Assistant Prosecutor Robert Morgan and Weekley’s defense attorney Steven Fishman, has repeatedly postponed trial proceedings in Weekley’s case since Nov. 2011. 

In related news, Detroit police chief James Craig fired Inspector Don Johnson, head of the city’s Department of Homeland Security and also the official who gave the final approval for the raid on Aiyana’s home. Johnson was fired for sending a photo of his genitals to a female police captain.

Weekley’s defense attorney told Johnson on cross-exam during Weekley’s first trial that “someone” (Aiyana’s grandmother Mertilla Jones) had testified that police murdered Aiyana.

“You’ve got to be joking,” Johnson replied.

Aiyana's family celebrates her life at birthday graveside memorial July 20, 2013.

Aiyana’s family celebrates her life at birthday graveside memorial July 20, 2013.

The courtroom July 25 was packed with news media, including cameramen and a reporter from Japan’s Fuji TV. 

Hathaway also sentenced former A&E producer Allison Howard, charged with obstruction of justice in the case, to two years of probation with lenient terms and astonishingly sympathetic comments, including encouraging Howard to resume her career filming police actions. 

Howard supervised “First 48’s” filming of the horrific raid on the child’s home by a police military squad in riot gear which threw a stun grenade into the window under which Aiyana was sleeping with her grandmother May 16, 2010.Weekley then entered the home and shot the child to death with an MP5 submachine gun within three seconds,  according to testimony in his first trial. 

Aiyana's family members at her graveside on her birthday July 20, 2013.

Aiyana’s family members at her graveside on her birthday July 20, 2013.

The hearing happened only days after Aiyana’s birthday July 20, when she would have turned 11. Her family said they gathered that day at the cemetery to remember her and celebrate her life and their love for her with a birthday cake and balloons, as they do every year. 

Aiyana’s father Charles Jones and her aunt’s former fiancé Chauncey Owens face a pre-trial exam Sept. 21 and a trial date of Oct. 20 in the killing of Je’rean Blake, 17. They have both been incarcerated in the Wayne County jail without bond, Owens since the day Aiyana was killed, and her father since November, 2011. 

Aiyana's paternal grandmother Mertilla jones during birthday celebration July 20, 2013.

Aiyana’s paternal grandmother Mertilla jones during birthday celebration July 20, 2013.

A family friend who was present said, “They’re probably trying again to postpone Weekley’s trial until after Aiyana’s dad’s case. It doesn’t seem fair that the judge should postpone it because the trials that have been on her docket the longest should be the first ones heard. They’re trying to make people forget about Aiyana.” 

Another friend said, “It will be three and a half years since they killed Aiyana, and her dad has been sitting in jail for two years. They’re basing his case on what someone in jail said. They shouldn’t be able to use word of mouth. If someone in jail can say they heard someone say he was involved in Je’Rean’s killing, why can’t I testify and say he told me he was not involved? Who could say my voice is not stronger than a jail-house informant who is probably trying to get out?” 

Close-up of Aiyana birthday T-shirt.

Close-up of Aiyana birthday T-shirt.

“Jail-house” snitch Jay Schlenkerman testified at Jones’ preliminary exam that Owens claimed Jones gave him the gun to kill Blake, which Owens denies. According to Jones’ attorney Leon Weiss, another jail-house snitch has come forward to testify about what he claims Jones told him. 

“They should let Charles out on bond,” said the friend, who is not being identified since family member and friends are continually being harassed, arrested and framed up by Detroit police in the wake of Aiyana’s horrific death. 

“He has missed the whole growth of his youngest child who is three now.” 

Dominika Jones said hers and Charles’ son Christan was born Feb. 14, 2010, just three months before their only daughter Aiyana was shot to death. 

Allison Howard and killer cop Joseph Weekley at earlier court hearing.

Allison Howard and killer cop Joseph Weekley at earlier court hearing.

Former A&E producer Allison Howard appeared with her attorney Robert Garrison for her sentencing on a plea deal after the Weekley case. Howard was present with “The First 48” crew, which filmed the assault on Aiyana’s home. 

Many in the community feel the raid was set up to put on a show for the cameras. Weekley and other SRT team officers are featured as stars on A&E’s previous “Detroit SWAT” website. Testimony during Weekley’s first trial showed that police could have arrested the target of the raid, Chauncey Owens, when he left the flat where he lived upstairs from Aiyana’s home twice during the day, under heavy police surveillance.

Family surrounds Aiyana's grave July 20, 2013.

Family surrounds Aiyana’s grave July 20, 2013.

Assistant Prosecutor Robert Moran earlier contended that Howard went to a party in the Detroit suburb of Canton with a police officer the night of the raid, and sold a copy of the A & E videotape to another man. 

In a separate, less publicized case, Detroit police locked up two men in the Wayne County jail for several months, saying they showed a copy of the police videotape of the raid to a third party. A source told VOD earlier that police replaced that videotape, which was the one shown to the family’s attorney Geoffrey Fieger, with a second tape, wiping out crucial evidence.

The police videotape was not shown at Weekley’s first trial.

Howard pled “no contest” to one charge of obstruction of justice, in exchange for the dropping of perjury charges.

Moran said, “This is a serious felony. Her obstruction of justice was severe as a result of the lies she told to the grand jury. It cost us seven months’ worth of investigation time, thousands of untold hours and dollars, and delayed her indictment and Joseph Weekley’s indictment.”

Aiyana's maternal grandparents Jimmie Stanley and Danielle Fields with her mother Dominika and another family member.

Aiyana’s maternal grandparents Jimmie Stanley and Danielle Fields with her mother Dominika and another family member.

Hathaway sentenced Howard to 24 months of probation, which she can serve in her home state of Massachusetts. The judge told her she has to report in person only the first six months, and in writing every six months afterwards. She assessed her a $2,000 fine and “up to” 200 hours of community service, including her photography skills, to benefit residents of Wayne County.

Hathaway said she is likely to waive court costs if Howard meets the terms of her probation and that she will consider shortening the probation. She added that Howard can do the community service “electronically” from her home state.

Aiyana Jones (l) playing in swimming pool with cousins before Detroit police killed her.

Aiyana Jones (l) playing in swimming pool with cousins before Detroit police killed her.

“This has been a pretty traumatic experience for you as well as others,” Hathaway told Howard, who is white, speaking kindly, unlike the tongue-lashing she gave to a young Black man just previously, in sentencing him to three years of probation including one in the Wayne County Jail.

“You are currently unemployed and have given up taking any assignments related to police raids, according to the probation report,” Hathaway said. “You probably do need a break, but I would encourage you to think about resuming [that work] in the future.”

Detroit Mayor Dave Bing forbade any further reality TV filming of Detroit police actions after Aiyana’s death, although he never met with the family to express condolences.

Judge Cynthia Gray Hathaway

Judge Cynthia Gray Hathaway

Hathaway concluded, “The court accepts the sentence agreement and thinks some real good can come out of this heart-breaking situation.”

Ron Scott, representing the Detroit Coalition Against Police Brutality, Inc., reacted with anger.

“This is a travesty,” he said. “The judge is letting Howard walk out of there just like it’s a holiday, while Aiyana’s family is still grieving because of the raid she filmed. The woman benefited from Aiyana’s death. She SOLD that tape. She should have been given a much more stringent sentence.”

Aiyana Jones would have been 11 on July 20, 2013, but was killed by Detroit police at the age of 7. Her family still celebrates her birthday every year. Photo: Dominika Jones

Aiyana Jones would have been 11 on July 20, 2013, but was killed by Detroit police at the age of 7. Her family still celebrates her birthday every year. Photo: Dominika Jones

 

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DETROIT BANKRUPTCY: SNYDER, ORR WANT RETIREES’ SUITS DUMPED WHILE CREDITOR UBS ANNOUNCES HIGH PROFITS; HEARING WED. JULY 24, 10 A.M. JUDGE RHODES

Detroit city worker's child demands "Back off our pensions" during strike at Wastewater Treatment Plant Sept. 30, 2012.

Detroit city worker’s child demands “Back off our pensions” during strike at Wastewater Treatment Plant Sept. 30, 2012.

State Judge Aquilina barred attack on pensions

Major city creditor UBS announces record profits, settles mortgage fraud suit; Orr wants retirees to take 10 cents on dollar 

City creditor US Bank NA charged in Ponzi set-up; Judge Rhodes co-authored “The Ponzi Book: A Legal Resource for Unraveling Ponzi Schemes” 

Emails show bankruptcy planned as early as January, in advance of negotiations with pension funds, unions

By Diane Bukowski 

July 23, 2012

DETROIT – In the first hearing on Detroit’s Chapter 9 filing July 24, U.S. Bankruptcy Judge Steven Rhodes will deal with Detroit Emergency Manager Kevyn Orr’s request to block further proceedings in state lawsuits filed by the city’s pension boards and two groups of retirees. Both Orr and Michigan Gov. Rick Snyder have openly said they are seeking to reduce pension benefits through the bankruptcy filing. 

Ingham County Circuit Court Judge Rosemarie Aquilina with three of her five children.

Ingham County Circuit Court Judge Rosemarie Aquilina with three of her five children.

The federal hearing is set for Wed. July 24 at 10 a.m. in Judge Rhodes’ courtroom at 211 W. Fort, Suite 1800. 

Ingham County Circuit Court Judge Rosemarie Aquilina on July 19 enjoined Snyder and Orr from targeting pension benefits in violation of both the State Constitution and Emergency Manager Act PA 436.

“I don’t think the constitution should be made to be Swiss cheese,” Judge Aquilina said July 22, to a courtroom packed with journalists representing global media. “Once we erode it with one hole, there will be others.”

She adjourned that hearing until July 29, 2013 at 9 a.m. at the request of the pension boards, not concurred in by defendants Orr and Snyder. She asked that numerous briefs be filed prior to the next hearing. Judge Aquilina’s court is located in the Ingham County Veterans Memorial Courthouse in Lansing at 313 W. Kalamazoo, Lansing, Michigain.

UBS profits soar along with goat sculpture in front of its offices.

UBS profits soar along with goat sculpture in front of its offices.

Meanwhile, major Detroit creditor UBS AG, which holds at least $1.5 billion in Pension Obligation Certificate (POC) debt, just announced increased profits and a $919 million settlement with the Federal Housing Financing Authority on charges that it defrauded homeowners on mortgage loans prior to the 2008 global economic crash. 

UBS, one of the world’s largest banks, embroiled in numerous criminal fraud scandals, has not agreed to cut city payments on the POC loan itself, although Orr has touted its agreement to take 75 cents on the dollar in a related $379 million swap deal. 

Robert Davis at union rally on Hart Plaza July 12.

Robert Davis at union rally on Hart Plaza July 12.

Also on July 22, union activist Robert Davis revealed a mass of emails obtained through a state lawsuit. He said the emails show members of the Jones Day law firm, Orr’s former employer and now Detroit’s “debt-restructuring consultant,” conspired as early as January to plot a bankruptcy filing. 

The city’s pension funds and unions have contended that Orr has not conducted good-faith negotiations with them prior to filing bankruptcy, a requisite for the judge’s approval of the petition for bankruptcy. 

RETIREES’ LAWSUITS 

The city’s two pension funds, the Detroit General Retirement System (DGRS) and the Detroit Police and Fire Retirement System (DPFRS), joined two individual groups of retirees in filing for a temporary restraining order against any impairment of pension benefits on July 17, just prior to EM Orr’s Chapter 9 bankruptcy filing July 18. 

Gov. Rick Snyder and Detroit EM Kevyn Orr at press conference July 19, 2013.

Gov. Rick Snyder and Detroit EM Kevyn Orr at press conference July 19, 2013.

The pension fund lawsuit says that Michigan Gov. Rick Snyder and Orr are violating both the Michigan Constitution and Emergency Manager Act PA 436 by demanding drastic reductions in pension pay-outs. It cites Chapter IX, Sec. 24 of the Michigan Constitution which says,    “[t]he accrued financial benefits of each pension plan of the state and its political subdivisions shall be a contractual obligation  thereof which shall not be diminished or impaired thereby.” 

Attorney Jerome Goldberg of the Moratorium NOW! Coalition said Michigan has one of the strongest constitutional protections for pensions in the country. The city of Central Falls, Rhode Island, cut pension benefits after filing bankruptcy, but its state constitution has no such protections. 

In addition to the state constitutional issue, the pension funds’ lawsuit challenges Orr’s authority under PA 436 to attack pension benefits, since PA 436 specifically provides that such benefits will be paid. 

City workers at Belle Isle picnic July 28, 2012 demand "No EM." Michigan citizens overwhelmingly repealed PA 4 Nov. 6, 2012, but Snyder replaced it with PA 436.

City workers at Belle Isle picnic July 28, 2012 demand “No EM.” Michigan citizens overwhelmingly repealed PA 4 Nov. 6, 2012, but Snyder replaced it with PA 436.

In their brief, the pension funds note, “It is clear that Michigan’s legislators never intended that the governor or an emergency financial manager take action in violation of Art IX Sec. 24. Indeed MCL 141.1552(m)(ii) [in PA 436] expressly provides that “[t]he emergency manager shall fully comply with . . . . section 24 of article IX of the state constitution of 1963. And MCL 38.1683 provides that “[t]he right of a member or retirant of a retirement system to a retirement benefit shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law and shall be unassignable.” 

In other words, say the pension funds, “[t]he governor may authorize and the emergency financial manager may petition for a chapter 9 municipal bankruptcy only to the extent that such action does not impair or diminish accrued financial benefits.” 

Miller Canfiled attorney Mike McGee at City Council table April 4, 2013, the day Council passed the disastrous consent agreement.

Miller Canfiled attorney Mike McGee at City Council table April 4, 2013, the day Council passed the disastrous consent agreement.

The pension funds are represented by Attorney Ron King and others from the law firm of Clark Hill. 

Snyder and Orr are represented by Miller Canfield. The Detroit City Council last year approved an extension of the city’s contract with Miller Canfield, whose attorney Mike McGee helped draft Public Act 4, the predecessor to PA 436, as well as the April 4, 2012 PA4 “consent agreement” between the city and the state, passed by the City Council 5-4. Miller Canfield is also advising the city on the bankruptcy filing. 

UBS PROFITS UP DESPITE GLOBAL LITIGATION; SETTLES MORTGAGE FRAUD CASE WITH FHFA

Bloomberg Businessweek reported July 22,  “UBS rose in Zurich trading after posting net income of about 690 million Swiss francs ($734 million). Profit climbed from 524 million francs a year ago and beat the 586 million-franc mean estimate of four analysts surveyed this month by Bloomberg. UBS attracted about 12.8 billion francs in net new funds to its wealth management units and increased its capital buffer, the bank said.

“UBS is exceeding analysts’ profit estimates for a second quarter in a row after Chief Executive Officer Sergio Ermotti announced 10,000 job cuts last year and a strategy to exit most debt-trading businesses at the investment bank to focus the firm on money management.”

The UPI reported the same day, “The Swiss bank UBS said Monday it had struck a deal with U.S. authorities to settle charges that it misrepresented mortgage bonds issued in 2004 through 2007.

“UBS settled with the Federal Housing Finance Agency, which has accused 18 big banks of overstating the value of bundled mortgage securities in advance of the 2008 financial meltdown that was largely caused by overwhelming numbers of defaulting home loans.

Christina Livingston, a supporter of people who had lost their homes to foreclosure, or have been battling banks over loan modification, reacts to cheers from fellow protesters as she is arrested outside a Chase bank branch in downtown Los Angeles.Thursday, Dec. 16, 2010.  Police arrested 22 protesters who blocked the doors to the bank in acts of civil disobedience.  (AP Photo/Reed Saxon)

Christina Livingston, a supporter of people who had lost their homes to foreclosure, or have been battling banks over loan modification, reacts to cheers from fellow protesters as she is arrested outside a Chase bank branch in downtown Los Angeles.Thursday, Dec. 16, 2010. Police arrested 22 protesters who blocked the doors to the bank in acts of civil disobedience. (AP Photo/Reed Saxon)

“Details of the agreement were not disclosed but The New York Times reported UBS said it was accepting a one-time, pretax charge of $919 million related to the settlement.

“The FHFA filed the lawsuit in 2011, seeking billions of dollars in compensation from the banks. FHFA losses involving UBS loans totaled $900 million, the Times said.”

In addition to those charges, UBS is involved in a criminal fraud lawsuit filed by the U.S. Department of Justice. It has agreed to a $1.5 billion fine while two UBS Japan traders are facing trial. UBS is one of the banks on the LIBOR (London Interbank-Offered Rate) panel which are facing charges globally for rigging interest rates to benefit themselves. LIBOR sets interest rates for practically every loan around the world.

LIBOR lawsuits have been filed by municipalities, states and other investors in the U.S. and globally.

US Bank NA let Russel Wasendorf, known at the "Midwest Madoff," use customers' money in Ponzi scheme.

US Bank NA let Russel Wasendorf, known at the “Midwest Madoff,” use customers’ money in Ponzi scheme.

US Bank NA is a city creditor that has been holding Detroit’s casino tax revenue hostage to ensure payment of the UBS debt.

On June 5, 2013, the U.S. Commodities Futures Trading Commission sued US Bank NA, alleging that it knowingly allowed Russell Wasendorf Sr., founder of Peregrine Financial which has since imploded, to use customer money held at the bank to finance his lavish lifestyle. Wasendorf is currently serving a term 0f 50 years in prison for taking over $215 million in client funds.

Since U.S. Bankruptcy Judge Rhodes is a co-author of “The Ponzi Book: A Legal Resource for Unraveling Ponzi Schemes,” he might want to look into US Bank NA’s role in Detroit’s debt situation.

EMAILS SHOW JONES DAY SOUGHT BANKRUPTCY AS EARLY AS JANUARY

Also on July 22, union activist Robert Davis and others held a press conference at the AFSCME Council 25 headquarters in downtown Detroit to reveal a slew of emails obtained through Davis’ lawsuit against Snyder’s appointment of Orr.

Dan Moss

Jones Day attorney Dan Moss

One email, sent by Jones Day attorney Dan Moss on Jan. 31, 2013 to Orr, already proposed to become Detroit’s emergency manager,  says “It seems that the ideal scenario would be that Snyder and [Mayor Dave] Bing both agree that the best option is simply to go through an orderly Chapter 9. This avoids an unnecessary political fight over the scope/authority of any appointed emergency manager and, moreover, moves the ball forward on setting Detroit on the right track.”

Davis said in published remarks, “It’s an outright slap in the face to the citizens in the city of Detroit . . .“You already see what their agenda is. It clearly indicates from day one … the decision [to file for Chapter 9 bankruptcy] was already made.”

Mike Mulholland protests 80 percent cut to DWSD workforce which is also part of Orr's plan.

Mike Mulholland protests 80 percent cut to DWSD workforce which is also part of Orr’s plan.

Davis’ contention is important because the U.S. Bankruptcy Code requires that good-faith negotiations with creditors be conducted prior to filing a petition for bankruptcy. Both the pension boards and the city’s unions have said that Orr blind-sided them with his “Proposal for Creditors,” which caused their representatives to “nearly jump out of their seats,” June 14, according to AFSCME Local 207 Vice-President Mike Mulholland. 

Mulholland said Orr made it clear at that meeting that he intended to remove the elected pension boards which oversee the funds. At a press conference July 19, Orr said he will file a motion to appoint a representative for retirees instead. 

Orr held two meetings after June 14 with pension and union officials. Many exited the meetings in fury after Orr demanded that they sign confidentiality agreements about the discussions and would not back down on his original demands.

Related documents and articles:

Aquilina ruling 7 22 13

Detroit pension fund brief 7 19 13

http://voiceofdetroit.net/2013/07/21/orr-jones-day-aim-bankruptcy-gun-at-detroit-retirees-let-wall-street-off-hearing-mon-july-22-9am/

http://voiceofdetroit.net/2013/07/06/orrs-phony-victory-on-casino-taxes-and u-s-bank-na/

http://voiceofdetroit.net/2013/07/03/sign-petition-to-request-us-doj-fraud-investigation-of-ubs-re-predatory-1-5-billion-detroit-loan/

http://voiceofdetroit.net/2013/07/01/while-detroit-em-orr-attacks-pension-board-travel-consultant-milliman-inc-luxuriates-in-dubai-at-worlds-most-expensive-hotel/

http://voiceofdetroit.net/2013/07/01/orr-milliman-attack-on-detroit-pensions-a-very-rough-preliminary-guesstimate/

http://voiceofdetroit.net/2013/06/20/em-orrs-plan-for-detroit-phony-debt-moratorium-theft-of-city-assets-including-water-belle-isle-pensions/

http://voiceofdetroit.net/2013/06/09/people-rise-up-against-em-kevyn-orr-and-bank-takeover-of-detroit/

http://voiceofdetroit.net/2013/05/16/detroit-em-orrs-report-envisions-a-nightmare-future/

A laid-off city worker sent the following announcement:

demo box

207 flier

Download flier above from Local 207 website at http://www.afscme207.com/ 

 __________________________________________________________________

MO flier

Download flier at Bankruptcy demo 7 26 12 flier

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TRAYVON MARTIN KILLED TWICE–JUSTICE FOR TRAYVON NATIONAL DAY OF ACTION PROTESTS IN 101 CITIES

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Above: Trayvon Martin’s father Tracy Martin speaks at rally in Miami, Florida July 20, 2013

TRAYVON MARTIN KILLED TWICE

George Zimmerman innocent verdict in the death of Trayvon Martin creates a national protest, including a rally in downtown Detroit.

A No Struggle, No Development Production by Kenneth Snodgrass

July 20, 2013

Kenneth Snodgrass, VOD Videojournalist

Kenneth Snodgrass, VOD Videojournalist

DETROIT  — About four thousand Metro Detroit residents took to the street Saturday to call for justice for slain Fla. young man Trayvon Martin. JUSTICE FOR TRAYVON MARTIN!

Their message: We protest in the name of justice for the family of TRAYVON MARTIN, the Black Community in Detroit and all over the country. We are protesting against both institutional and violence in communities.. We are protesting against the conditions that breed crime and violence in Detroit and across the country, which is rooted in the economic powerlessness of our communities. We protest the disrespect of racist whites and foreign merchants and others, of us and our communities.

Trayvon rally 7 20 13We feel violence and crime in our communities is rooted in our dependency on a racist economy, our mis-education, poor leadership, our economically depressed communities and families. Our peaceful protest demonstration is to show that a Black Man’s life is worth more than some petty merchandise. We are venting our emotions while coming together to fight against this racist violence that has created so much senseless violence again our people. We declare “WE” will answer to the problems confronting our communities through collective unity, and from collective unity we can accomplish any goals we set to achieve.

Out Of Tragedies Can Come Triumphs, Join Us! – –

A No Struggle, No Development! Production By Kenny Snodgrass, Activist, Photographer, Videographer, Author of From Victimization To Empowerment… www.trafford.com/07-0913 – eBook available at www.ebookstore.sony.com YouTube – I have over 260 community videos, and over 84,000 hits on my YouTube channel at www.YouTube.com/KennySnod

DETROIT RALLY AT FEDERAL BLDG. DOWNTOWN

PART ONE

PART TWO

PART THREE

PART FOUR

PART FIVE

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ORR, JONES DAY AIM BANKRUPTCY GUN AT DETROIT RETIREES, LET WALL STREET OFF; HEARING MON. JULY 22 9AM


{Above is live stream video from Freep of Bing/Orr press conference announcing bankruptcy filing July 18, 2013. Be patient with ad at beginning; it will go off and video begins in circular fashion due to live stream.)

Seek to pit residents against workers

Let Wall Street creditors off the hook with token cuts

Retirees contest bankruptcy filing in ongoing court case 

BY DIANE BUKOWSKI 

JULY 21, 2013 

Detroit Emergency Manager Kevyn Orr and Michigan Gov. Rick Snyder purport to represent the City of Detroit at press conference on bankrutpcy filing July 19, 2013.

Detroit Emergency Manager Kevyn Orr and Michigan Gov. Rick Snyder purport to represent the City of Detroit at press conference on bankrutpcy filing July 19, 2013.

DETROIT – Detroit emergency manager Kevyn Orr and his boss, Michigan Gov. Rick Snyder, directed by Orr’s long-time law firm Jones Day, filed a federal bankruptcy case for the City of Detroit July 18. It primarily targets the city’s retirees. Orr earlier used the threat of bankruptcy to demand that retirees agree to pension pay-outs of ten cents on the dollar. 

City workers pack Coleman A. Young lobby July 12, 2013, the day after retirees rejected Orr's plan.

City workers pack Coleman A. Young lobby July 12, 2013, the day after retirees rejected Orr’s plan.

They refused, countering that the State Constitution firmly protects public pension benefits. Ingham County Circuit Court Judge Rosemarie Aquilina enjoined Gov. Snyder and Orr from any further action on the filing July 19, during a hearing on three lawsuits by retirees. Another hearing on their ongoing cases is to be held July 22 at 9 a.m. in Judge Aquilina’s court in Mason, MI.  State Attorney General Bill Schuette has appealed her ruling. 

Article 9, Section 24 of Michigan’s Constitution section reads: “The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby. Financial benefits arising on account of service rendered in each fiscal year shall be funded during that year and such funding shall not be used for financing unfunded accrued liabilities.” 

UBS CEO Sergio Ermetti before fall from fortune and USDOJ criminal fine of $1.5 billion.

UBS CEO Sergio Ermetti before fall from fortune and USDOJ criminal fine of $1.5 billion.

In contrast to his demands from retirees. Orr said he reached an agreement with global banks UBS AG and Bank of America/Merrill Lynch to take 75 cents of the dollar for $379 million in swap agreements. 

The Detroit bankruptcy is the largest municipal bankruptcy in the history of the U.S. It has created a bittersweet panic on Wall Street, where investors are selling Detroit’s General Obligation Bonds (GOB) at bargain basement prices. 

Over $13.7 billion in municipal bonds overall have been sold off in the last eight weeks amid speculation about Detroit’s situation, and Orr’s first-time designation of GOB’s as “unsecured debt,”  according to the Wall Street Journal. The Journal also notes, however, that the sell-offs will result in “high yields” for investors. 

At a press conference July 18, Orr downplayed the gravity of the filing. 

Orr says city's debt crisis due to POC's.

Orr says city’s debt crisis due to POC’s.

“It is large in terms of the magnitude of debt,” Orr said, alleging the city’s long-term debt totals $18 billion. “But Detroit has been working its way to a level of insolvency for decades. Part of the reason we’re here is that in 2005 and 2006, Detroit borrowed $1.5 billion to provide a solution for pension obligations, then hedged those with swap agreements for which we paid hundreds of millions. We went into default on those agreements in 2009 so we doubled down and pledged the city’s casino revenues to support the agreements. For some time, Detroit has simply not been on a sustainable footing.” 

Orr referred to loans from UBS AG and Siebert, Brandford and Shank, now SBS Financial. Representatives of Standard and Poor’s and Fitch Ratings actually came to the City Council table Jan. 31, 2005 to push for the loans. In another conflict of interest, the city’s Chief Financial Officer in 2005, Sean Werdlow, took a top manager position with SBS later that year. 

Ratings agencies later downgraded the city’s debt rating anyway, most recently after Orr deliberately defaulted on a $37.9 million POC payment due June 14, when he met with the city’s creditors. With the bankruptcy filing, the ratings have plunged even further. 

U.S. Attorney General Eric Holder announces $1.5 billion criminal fraud fine paid by UBS>

U.S. Attorney General Eric Holder announces $1.5 billion criminal fraud fine paid by UBS>

Orr deflected questions from this reporter on the legitimacy of that loan at a press conference July 19 and also during the press conference held to announce his appointment in May. 

He has repeatedly refused to discuss the fact that UBS AG paid a $1.5 billion fine to the U.S. Department of Justice in a criminal fraud case, and that Standard and Poor’s currently faces a $5 billion USDOJ criminal fraud lawsuit. After the press conference, State Treasurer Andy Dillon off-handedly claimed the state is investigating the loan, since Orr’s proposal to creditors cites its possible illegitimacy, but he was clearly not being serious. (VOD has started a petition on Change.Org at http://www.change.org/petitions/jeffrey-knox-usdoj-criminal-fraud-division-investigate-criminal-bank-ubs-ag-for-predatory-1-5-billion-loan-to-detroit. Please click link and sign.)

New Wave under 35 rally at Hart Plaza before march to Coleman A. Young Cneter July 12, 2013.

New Wave under 35 rally at Hart Plaza before march to Coleman A. Young Cneter July 12, 2013.

Orr has used the POC debt to blame retirees for the City’s alleged economic crisis. However,  the city’s pension boards, retirees, and unions all vehemently opposed the risky POC deal, which experts condemned at a forum sponsored by then Mayor Kwame Kilpatrick earlier that year as “one of the seven deadly sins of municipal finance.” 

Across the country, POC studies have found that many cities faced economic ruin as a result of borrowing pension bonds prior to the global economic melt-down of 2008. None of the lenders has been held accountable for what many experts termed nothing more than a crap shoot based on Wall Street vagaries. Pension bonds basically bet that interest rates will go down and save a municipality money on its total outstanding pension debt, but that did not happend after 2008.

Rev. Charles Williams of the National Action Network speaks at rally demanding moratorium on Detroit's debt to banks May 9, 2012.

Rev. Charles Williams Sr. of the National Action Network speaks at rally demanding moratorium on Detroit’s debt to banks May 9, 2012.

At the July 19 press conference, Snyder said the bankruptcy filing is aimed at restoring services to city residents, while also claiming that the city’s chief problem is “city government.”

“In 1950, Detroit had a population of $1.8 million; now its population is 680,000,” Snyder said. “The city is filled with blight, there are 78,000 abandoned structures, and the level of services is unacceptable. Police response time is 58 minutes, while the national average is 11 minutes. In 24 of the years since 1985, Detroit has been in the top ten of the most violent cities in the country.” 

Neither Orr, Snyder nor Dillon laid the blame for the city’s condition on corporations including the auto companies which have fled Detroit, devastating its tax base, or banks and mortgage companies which targeted predominantly Black and Latino cities for predatory “adjustable rate” mortgages, then illegally foreclosed on the homeowners involved. The banks are not paying taxes on the foreclosed properties, and according to a national study, are not maintaining foreclosed properties for re-sale in poor communities of color. 

Pres. Barack Obama with campaign contributor Robert Wolf, formerly head of UBS Americas division.

Pres. Barack Obama with campaign contributor Robert Wolf, formerly head of UBS Americas division.

Ingham County Circuit Court Judge Rosemarie Aquilina sent a copy of her order enjoining the bankruptcy filing to U.S. President Barack Obama. Under the federal Chapter 9 Bankruptcy Code, the U.S. Treasurer can intervene in a municipal bankruptcy filing. 

A spokesperson for the President, however, said he has no intention of doing so but is offering his help in other unspecified ways. Vice-President Joe Biden said later that there will be no bail-out along the lines of those granted to Detroit automakers and banks during Obama’s terms of office. 

To date, no municipal bankruptcy filing has touched actual pension checks. The city of Stockton, CA, which filed for bankruptcy in 2011, is leaving pension pay-outs alone in exchange for the California Public Employees Retirement System (CalPERS) agreement to take a one-time two percent pay-out on health care benefits. 

Silly poor people help is for banksDuring  the July 19 press conference at Detroit’s Maccabbees Building, one reporter asked Orr, “Aren’t you funding the city’s crisis on the backs of the poorest people?” Another asked why he is demanding that the city’s pension funds take ten cents on the dollar, contrasting that to the 75 cents on a dollar agreed to with UBS AG and Bank of America/Merrill Lynch. 

“The $2 billion [total] payment I am proposing for unsecured creditors is the only mechanism possible,” Orr responded. “UBS and Merrill Lynch are secured creditors. They agreed to release their losses and not seek secondary action against their insurer.” 

Protest outside Orr's "public meeting" June 10.

Protest outside Orr’s “public meeting” June 10.

Orr has said the city will continue to pay UBS/BOA on the swaps until the bankruptcy is finalized. The Chapter 9 bankruptcy code,as well as Michigan Public Act 436, under which Orr operates, however, provide that the city must not be able to pay its debts for the next 60 days. 

Orr considers the money the city owes to its pension funds, as well as GOB’s, to be “unsecured debt,” despite continued payments into the funds’ annuity plans by active city workers. He has said city payments to the funds will cease during bankruptcy proceedings and that eventually he wants to convert the funds to “defined benefit” plans or even 401K’s, not financed by the city. 

Judge Steven Rhodes (center) announcing publication of "The Ponzi Book: A Legal Resource for Unraveling Ponzi Schemes," published by LexisNexis®.. He is a co-author. He needs to investigate the Ponzi scheme for which the U.S. Commodities Future Trading Commission is investigating US Bank NA>

Judge Steven Rhodes (center) announcing publication of “The Ponzi Book: A Legal Resource for Unraveling Ponzi Schemes,” published by LexisNexis®.. He is a co-author. He needs to investigate the Ponzi scheme for which the U.S. Commodities Future Trading Commission has charged Detroit creditor US Bank NA.

He said he was not sure if the agreement with UBS/BOA has been signed. U.S. Bankruptcy Court Judge Steven Rhodes, of the Eastern District of Michigan, who has been selected to oversee the case, must authorize all such agreements. He has not yet even held a hearing. Orr is asking for an expedited process beginning as early as July 23.

Orr added that he has reached agreement with US Bank NA to release $180 million a year in city casino tax revenues being held in trust to assure payment of the $1.5 billion POC loan. US Bank NA’s insurer Syncora, Inc. has not yet agreed to release the funds, however. 

Orr said he expects the bankruptcy to be finalized by summer or fall of 2014, although such proceedings for other cities like Stockton, CA are taking place over much longer periods and have not yet concluded. 

Orr lost his customary cool when discussing the city’s retirees. 

AFSCME Co. 25 rep Ed McNeil denounces Orr and Jones Day for requiring those in negotiations to sign confidentiality agreements.

AFSCME Co. 25 rep Ed McNeil denounces Orr and Jones Day for requiring those in negotiations to sign confidentiality agreements.

“I am being sued on a weekly basis,” he declared, referring to the retiree lawsuits. 

Orr said he has held ongoing “good faith” discussions with “unsecured” parties including the retirees which have resulted in no agreements for cuts in pension pay-outs. On July 11, some union and pension representatives stormed out of a meeting after being asked to sign confidentiality agreements on the discussions. The next day, hundreds of young demonstrators from AFSCME’s “New Wave Under 35” national convention rallied and stormed the Coleman A. Young Center.

Orr said that he is constrained by the time limit of his alleged 18-month tenure. Reports that the city council can vote him out after that period have been incomplete, since Public Act 436 says such a vote must be approved by the Mayor, and that the Governor can override that decision if he decides a longer period is necessary. 

Fourth of July protest demanding independence for Detroit at Orr's residence at the Westin Book-Cadillac. One protester demands, Hands off city pension funds.

Fourth of July protest demanding independence for Detroit at Orr’s residence at the Westin Book-Cadillac. One protester demands, Hands off city pension funds.

Additionally, PA 436 provides for a “transition” period after exiting emergency management, during which the governor and state treasurer still hold the reins. 

“I have asked the unions if they will represent the retirees in court,” Orr said. “They refused. So I am moving to appoint a retirees’ committee. This is an unusual step, asking to appoint an opposing party.” 

Orr did not respond when asked about the role of the city’s two elected pension boards, the Detroit General Retirement System (DGRS) and the Detroit Police and Fire Retirement System (DPFRS), which actually represent retirees. 

Retired Detroit Water & Sewerage Department worker and long-time AFSCME Local 207 officer Mike Mulholland, who has been present in the negotiations, refuted Orr’s allegations in an article by Jane Slaughter published in Labor Notes. 

DWSD retiree Mike Mulholland speaks at rally against appointment of Emergency Manager.

DWSD retiree Mike Mulholland speaks at rally against appointment of Emergency Manager.

“It wasn’t negotiations, it was PowerPoint presentations about how bad the situation is,” Mulholland told Labor Notes. “Orr wouldn’t answer AFSCME’s requests for negotiations, so they went and taped a letter to the door of his office.” 

Earlier, after Orr’s June 14 meeting with city creditors, held at the Wayne County Airport, Mulholland said that union and pension board representatives present “were right on the verge of jumping out of their seats. Orr made it clear that he will remove the pension boards under PA 436, but said the pension boards can still negotiate with him. By that time, he will be the only representative of the pension boards.” 

PA 436 contains a clause allowing the EM through the governor to remove one or more elected officials of pension boards representing systems that are less than 80 percent funded, and replace them with a person(s) of their choosing. 

While Orr criticized Detroit pension officials for travel expenses, Milliman sponsored a convention in world's most expensive hotel in Dubai.

While Orr criticized Detroit pension officials for travel expenses, Milliman sponsored a convention in world’s most expensive hotel in Dubai.

Milliman, Inc., hired by the city to review the status of its pension funds, has said that as of 2010, The GRS was 32 percent funded, while the DPFRS was 50 percent funded, in conflict with figures published by the pension funds’ official actuary, Gabriel, Roeder and Smith which showed much higher levels. The Milliman reports have not been publicly released.

The complaint, filed on behalf of retirees Robbie Flowers, Michael Wells, and Janet Whitson, says, “The Detroit Emergency Manager has, as part of his restructuring planning, publicly announced that he intends to significantly cut vested pension amounts of the city’s retirees and employees in violation of Article 9, Section 24 and threatened to seek to extinguish their Article 9, Section 24 rights in bankruptcy if they fail to agree which they have not.” 

Robbie Flowers, a City of Detroit Library worker, at convention for librarians.

Robbie Flowers, a City of Detroit Library worker and a plaintiff in the lawsuit, at convention for librarians.

Although Snyder and Orr’s attorneys contended at the hearing that the Chapter 9 filing does not mean pensions will necessarily be cut, the complaint quotes Orr’s comments from an interview with the Detroit Free Press editorial board. 

“It is what it is – so we said that in a soft way of saying, ‘Don’t make us go into  bankruptcy,'” Orr is quoted as saying. “If you think your state-vested pension rights, either as an employee or a retiree – that’s not going to protect you. If we don’t reach an agreement one way or the other, we feel fairly confident that the state federal law, federalism, will trump state law or negotiate. The irony of the situation is we might reach a deal with creditors quicker because employees and retirees think there is some benefit and that might force our hand. That might force a bankruptcy.” 

City Council candidate Monica Patrick speaks at rally to save Belle Isle from state control.

City Council candidate Monica Patrick speaks at rally to save Belle Isle from state control.

To read about the devastating results Orr’s proposed bankruptcy will have on city residents, see story link on “Orr’s plan for Detroit below this article.   Orr has said that his proposal to creditors, described in that story, is basically identical to the plan of adjustment he plans to present to the bankruptcy court. It includes mammoth service cuts for city residents, including the loss of 40 percent of the city’s street lights,  and likely asset conversions and sell-offs for entities like the Water and Sewerage Department, D-DOT, and Belle Isle. 

Although Chapter 9 bankruptcy precludes the liquidation of a municipality’s assets to pay off creditors, it allows such liquidation to happen  if the municipality consents. 

United States bankruptcy code books.

United States bankruptcy code books.

Additionally, while Chapter 9 says filing is limited to a “municipality,” it also says “chapter [9] does not limit or impair the power of a State to control, by legislation or otherwise, a municipality of or in such State in the exercise of the political or governmental powers of the municipality, including expenditures for such exercise.” This author questioned Orr’s authority under federal law to file for bankruptcy July 19, but this provision pretty much answers that question. 

Meanwhile, however, the U.S. Bankruptcy Code says “[t]he Secretary of the Treasury of the United States may, or if requested by the court shall, intervene in a chapter 9 case.” Fed. R. Bankr. P. 2018(c). Further, “[r]epresentatives of the state in which the debtor is located may intervene in a chapter 9 case.” Id. In addition, the Bankruptcy Code permits the Securities and Exchange Commission to appear and be heard on any issue and gives parties in interest the right to appear and be heard on any issue in a case. 11 U.S.C. §§ 901(a), 1109. Parties in interest include municipal employees, local residents, non-resident owners of real property, special tax payers, securities firms, and local banks.” 

Mass protest in France against pension cuts.

Mass protest in France against pension cuts.

If President Barack Obama, Vice President Joe Biden, and their cabinet, will not intervene on behalf of the people of Detroit, the only option is for city workers and retirees, local residents, and others to intervene, BY ANY MEANS NECESSARY. A court intervention is one way. 

The massive demonstrations this week across the country against the Trayvon Martin verdict, and calls for boycotts of Florida products, along with admittedly small but signficiant traffic blockades on Woodward by the Citizens for Highland Park Schools, point the way for other means.

General strike in Greece Feb. 20, 2013.

General strike in Greece Feb. 20, 2013.

The labor movement must also reinvigorate itself according to its founding principles. The five-minute occupation of the Coleman A. Young Center July  by AFSCME’S New Wave under 35 was a start—but please—five minutes? The top union leadership of the UAW and the rest of the AFL-CIO has refused to call on the economic clout of its workers with a general strike, It’s time now—as the largest and poorest Black majority city in the U.S. is used a a sacrificial lamb to Wall Street’s dictum that “Capitalism must grow or die.” 

Better the death of capitalism than the millions of poor and working people across the U.S. and the world, deprived of the basic means of sustenance, herded into prison concentration camps, and slaughtered by the increasingly militarized police and the U.S.-NATO armies across the world.

The video below shows young residents of Pittsburgh, another city which fell victim to the POC craze, reciting their program for a new world.

Related stories and documents:

US Courts Chapter 9 Bankruptcy

PA 436 of 2012

Detroit petition for bankruptcy

Acquilina order on bankruptcy 7 19 13

Retiree lawsu;it complaint; Retiree lawsuit brief; Retiree lawsuit motion070313_1

http://voiceofdetroit.net/2013/06/20/em-orrs-plan-for-detroit-phony-debt-moratorium-theft-of-city-assets-including-water-belle-isle-pensions/

Pension Obligation Bonds Risky Gimmick or Smart Investment

Detroit Bankruptcy Reverberates in Michigan and in Bond Markets WSJ 7 19 13

Detroit Bankruptcy Takes Aim at Pensions Labor Notes

SP Further Cuts Detroit Rating as City to Halt Paying Pension Debt

And many more from Voice of Detroit–just put “banks” in search box.

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DETROIT BONDS DROP; JUDGE SEEKS TO HALT BANKRUPTCY FILING

Snyder Orr 7 19 13 better

DETROIT EM KEVYN ORR (r) AND BOSS MICHIGAN GOV. RICK SNYDER (l) AT PRESS CONFERENCE JULY 19, 2013.

(VOD covered Friday press conference with Detroit EM Kevyn Orr and Gov. Rick Snyder and is researching matters; story coming this week-end. Meanwhile, Judge Rosemarie Aquilina’s order forbidding further action on bankruptcy is at Acquilina order on bankruptcy 7 19 13, motion and briefs by retirees’ attorneys in one case are at Retiree lawsuit complaint; Retiree lawsuit motion070313_1; and Retiree lawsuit brief. Judge Aquilina said she was prepared to rule in favor of retirees prior to temporary halt to hearing. She will continue hearing the case Monday, July 22 at 9 a.m. in the 30th Circuit Court in Mason, Michigan.)

Published: Saturday, 20 Jul 2013 | 5:13 AM ET Reuters

Investors dumped Detroit’s municipal bonds a day after the city’s historic bankruptcy filing even as a ruling in state court raised questions about whether the bankruptcy will stand up to court review. 

Judge Rosemarie Aquilina

Judge Rosemarie Aquilina

Attempts by Michigan Governor Rick Snyder and Detroit’s Emergency Manager Kevyn Orr to put a positive spin on the largest municipal bankruptcy in U.S. history failed to reassure investors. Prices on some Detroit bonds plunged and there were wider declines in the $3.7 trillion U.S. municipal bond market. 

The state court judge in Michigan’s capital of Lansing [actually Ingham County Circuit Court in Mason, Michigan] ordered Orr to withdraw the bankruptcy petition because the state law that allowed Snyder to approve the bankruptcy violated the Michigan Constitution. The governor lacks the power to “diminish or impair pension benefits,” according to the ruling by Ingham County Circuit Court Judge Rosemarie Aquilina. 

Michigan Attorney General Bill Schuette, acting on behalf of Snyder, quickly filed an appeal with the state appeals court. His office said motions seeking emergency consideration were expected to be filed later on Friday. 

(Read More: Detroit’s bankruptcy battle likely to be long and painful

U.S. Bankruptcy Court Judge Steven Rhodes, assigned to Detroit case.

U.S. Bankruptcy Court Judge Steven Rhodes, assigned to Detroit case.

Orr, meanwhile, filed a motion with Federal Bankruptcy Court Judge Steven Rhodes, who was appointed on Friday to oversee the Detroit case, requesting a hearing as soon as Tuesday on his request to place lawsuits aimed at derailing the city’s Chapter 9 proceedings on hold. The emergency manager’s motion also asked the judge to rule on deadlines, schedules, notification lists and other procedural matters. 

Ken Klee, a bankruptcy lawyer at Klee, Tuchin, Bogdanoff & Stern LLP, said the Judge Aquilina’s orders could be coming too late in the Detroit bankruptcy case. 

“The state judge could not order Detroit to dismiss the case or Kevyn Orr to dismiss it, because once it’s filed the automatic stay under the bankruptcy code kicks in, to protect the city and its employees from lawsuits,” he said. 

Neither Snyder nor Orr could necessarily be compelled to withdraw the city’s petition at this juncture, he added. 

(Read More: Detroit bankruptcy could hit millions of retirees)

Orr, who was appointed by Snyder in March to try to resolve the city’s financial crisis and tackle its $18.5 billion in long-term debt, acknowledged that court battles over the need for a bankruptcy filing could be protracted and difficult. 

Detroit Mayor Dave Bing greets U.S. President Barack Obama.

Detroit Mayor Dave Bing greets U.S. President Barack Obama.

A first test in a Chapter 9 bankruptcy proceeding is whether the city has explored other reasonable options before filing, and the city will “have an eligibility fight, I suspect” over the decision, Orr said. 

Detroit Mayor Dave Bing says it is unlikely President Obama will bail out the city. Charlie Langton, Langton Law partner, believes the city will get a bailout, while Carol Roth, author of “The Entrepreneur Equation, is against it. 

In the bankruptcy filing, Orr stated he has set an objective to conclude the bankruptcy process no later than September 2014. 

“I’ve got 15 months left on my tenure,” Orr said. “I promised the governor that we were going to try and get this done within the time frame provided by the statute.” 

Judge Rhodes of the U.S. District Court for the Eastern District of Michigan was assigned to oversee the Detroit case, which involves thousands of creditors. Bankruptcy experts expect the case could last years and cost tens of millions of dollars. 

(Read More: Tear down chunks of Detroit: Billionaire landowner

Protest against EM law March 14, 2013

Protest against EM law March 14, 2013

Under the 2012 Michigan law that created the emergency manager position, Orr’s term is limited to 18 months, after which he can be removed by a two-thirds vote of Detroit’s city council. 

Detroit, a former manufacturing powerhouse and cradle of the U.S. automotive industry and Motown music, has struggled for decades as companies moved or closed, crime became rampant and its population shriveled by about 25 percent in the past decade to 700,000. 

Under the state law that created the emergency manager position, Detroit could not file for bankruptcy without the governor’s approval. Lawsuits by pension funds and city workers, filed earlier this month, had sought to prevent a filing. But on Thursday, Orr filed the bankruptcy petition, with Snyder’s permission, just minutes before Judge Aquilina was set to rule on a petition to stop the process. 

In an interview with Reuters on Friday, Snyder sidestepped the constitutional question.

“That’s a matter in litigation and we have very good attorneys who I’m sure are on top of that,” he said. 

The governor has sought to paint the bankruptcy filing as a positive move for the city and the state. 

Sculpture of Joe Louis' fist in downtown Detroit.

Sculpture of Joe Louis’ fist in downtown Detroit.

“We’re the comeback state in Michigan, but to be a great state we need…Detroit on the path to being a great city again,” Snyder, a Republican, said at a press conference. 

Snyder acknowledged that the bankruptcy would be seen as a new low point for the city, but said, “This is the day to stabilize Detroit.” 

Orr addressed concerns that art works at the Detroit Institute of Arts or other city assets would be auctioned off to pay off creditors, who have been offered pennies on the dollar. 

(Read More: Should Detroit sell its art collection?

“Right now, there’s nothing for sale,” he said. 

U.S. Vice President Joe Biden told reporters on Friday that White House officials had been briefed on Detroit’s situation, but that it was unclear what help the administration could provide. 

In the state court proceeding on Friday, Judge Aquilina said she plans to keep the White House informed on matters affecting pensions by sending her rulings in the state cases to President Barack Obama, according to her law clerk, and attorney William Wertheimer, who is representing retirees in a lawsuit. Continue reading

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DETROIT FILES FOR LARGEST U.S. MUNICIPAL BANKRUPTCY IN HISTORY

VOD: Detroit EM Kevyn Orr made a flash announcement during a press conference held with little notice today at 6:15 p.m. that Gov. Rick Snyder has authorized the City of Detroit to file for bankruptcy. He and Snyder are to hold a press conference tomorrow, Friday, July 19 at 10 .m. with more details. Meanwhile, click on Detroit petition for bankruptcy for text of bankruptcy petition filed Thursday. VOD will publish an analytical article on this matter as soon as possible, that will be more “fair and balanced” than the Fox News coverage below.

Stockton city worker leaves city hall.

Stockton city worker leaves city hall.

One dangerous note: this bankruptcy filing is unlike previous filings in Stockton, CA and other cities, because an unelected official, Kevyn Orr, with no accountability to the people of Detroit, will represent the city in bankruptcy court. In other cities that have filed for municipal bankruptcy, their elected officials have in many cases fought for the rights of the cities’ retirees. Orr’s intent in filing is to bypass state law which protects retirees’ pensions, and seek a precedent-setting decision in federal court that would equate retirees with giant global banks and corporations.

logo-foxnews-updateJuly 18, 2013

Detroit filed for the largest municipal bankruptcy in U.S. history Thursday after steep population and tax base declines sent it tumbling toward insolvency.

The filing by a state-appointed emergency manager means that if the bankruptcy filing is approved, city assets could be liquidated to satisfy demands for payment.

Detroit EM Kevyn Orr (r) with advisors Bruce Bennett of the Jones Day law firm and Kenneth Buckfire of Miller Buckfire, during press briefing before his creditor's meeting June 14, 2013 at Metro Airport.

Detroit EM Kevyn Orr (r) with advisors Bruce Bennett of the Jones Day law firm and Kenneth Buckfire of Miller Buckfire, during press briefing before his creditor’s meeting June 14, 2013 at Metro Airport.

Kevin Orr, a bankruptcy expert, was hired by the state in March to lead Detroit out of a fiscal free-fall, and made the filing Thursday in federal bankruptcy court.

“Only one feasible path offers a way out,” Gov. Rick Snyder said in a letter to Orr and state Treasurer Andy Dillon approving the bankruptcy. The letter was attached to the bankruptcy filing.

“The citizens of Detroit need and deserve a clear road out of the cycle of ever-decreasing services,” Snyder wrote. “The city’s creditors, as well as its many dedicated public servants, deserve to know what promises the city can and will keep. The only way to do those things is to radically restructure the city and allow it to reinvent itself without the burden of impossible obligations.”

Gov. Snyder marches in Benton Harbor Blossomtime Parade last year to jeers from hundreds of protesteres.

Gov. Snyder marches in Benton Harbor Blossomtime Parade last year to jeers from hundreds of protesteres.

Snyder had determined earlier this year that Detroit was in a financial emergency and without a plan to improve things. Snyder hired Orr in March, and he released a plan to restructure the city’s debt and obligations that would leave many creditors with much less than they are owed.

Orr was unable to convince a host of creditors, including the city’s union and pension boards, to take pennies on the dollar to help facilitate the city’s massive financial restructuring.

Some creditors were asked to take about 10 cents on the dollar of what the city owed them. Underfunded pension claims would have received less than 10 cents on the dollar under that plan.

Detroit EM Kevyn Orr at press conference announcing his appointment by Gov. Rick Snyder (in background).

Detroit EM Kevyn Orr at press conference announcing his appointment by Gov. Rick Snyder (in background).

A team of financial experts put together by Orr said that proposal was Detroit’s one shot to permanently fix its fiscal problems.

The filing leads to a 30 to 90 day period that will determine whether or not the city of Detroit is eligible for Chapter 9 protection, and define the number of claimants who may compete for Detroit’s limited settlement resources. The petition seeks protection from unions and creditors who are renegotiating $18.5 billion in debt and liabilities, according to the Detroit Free Press.

“The President and members of the President’s senior team continue to closely monitor the situation in Detroit,” White House spokeswoman Amy Brundage said in a statement Thursday.

“While leaders on the ground in Michigan and the city’s creditors understand that they must find a solution to Detroit’s serious financial challenge, we remain committed to continuing our strong partnership with Detroit as it works to recover and revitalize and maintain its status as one of America’s great cities,” the statement read.

ROBERT WOLF, WHILE HEAD OF THE GLOBAL SWISS BANK UBS AG'S AMERICAS DIVISION, WAS ONE OF THE BIGGEST FUNDRAIDERS FOR PRES. BARACK OBAMA'S CAMPAIGN, ACCORDING TO THE NEW YORK TIMES. UBS AG FOISTED A PREDATORY $1.5 BILLION POC LOAN ON DETROIT IN 2005, WHICH THE CITY HAS DEFAULTED ON THREE TIMES, CAUSING ITS CREDIT RATINGS TO DROP AND ITS CASINO TAXES TO BE HELD HOSTAGE TO PAY OFF THE DEBT.

ROBERT WOLF, WHILE HEAD OF THE GLOBAL SWISS BANK UBS AG’S AMERICAS DIVISION, WAS ONE OF THE BIGGEST FUNDRAIDERS FOR PRES. BARACK OBAMA’S CAMPAIGN, ACCORDING TO THE NEW YORK TIMES. UBS AG FOISTED A PREDATORY $1.5 BILLION POC LOAN ON DETROIT IN 2005, WHICH THE CITY HAS DEFAULTED ON THREE TIMES, CAUSING ITS CREDIT RATINGS TO DROP AND ITS CASINO TAXES TO BE HELD HOSTAGE TO PAY OFF THE DEBT.

(VOD: Click on http://dealbook.nytimes.com/2012/07/19/wolf-to-leave-ubs-to-form-new-firm/ to read entire NYT Dealbook article on Detroit creditor UBS AG’s role in funding Pres. Barack Obama’s campaign. The President to date has ignored pleas from Michigan’s Black residents to have the Justice Department investigate the fact that Emergency Manager Acts have disenfranchised more than half of them. Until today, he has not weighed in on the Emergency Manager takeover the nation’s largest Black-majority city, Detroit.)

Sen. Carl Levin, D-Mich., remained positive about Detroit’s outlook in spite of the major blow that bankruptcy delivered:

Protesters at airport during Kevyn Orr's meeting with creditors June 14 demanded: CANCEL THE CITY'S DEBT.

Protesters at airport during Kevyn Orr’s meeting with creditors June 14 demanded: CANCEL THE CITY’S DEBT.

“I know firsthand, because I live in Detroit, that our city is on the rebound in some key ways, and I know deep in my heart that the people of Detroit will face this latest challenge with the same determination that we have always shown,” the Senator said in a statement released Thursday.

Subprime mortgages monster

Predatory mortgage loans and illegal foreclosures drove 170,000 families out of Detroit.

A number of factors — most notably steep population and tax base falls — have been blamed on Detroit’s descent toward insolvency.

Detroit was once synonymous with U.S. manufacturing prowess. Its automotive giants switched production to planes, tanks and munitions during World War II, earning the city the nickname “Arsenal of Democracy.”

Detroit lost a quarter-million residents between 2000 and 2010. A population that in the 1950s reached 1.8 million is struggling to stay above 700,000. Much of the middle-class and scores of businesses also have fled Detroit, taking their tax dollars with them.

Detroit’s budget deficit is believed to be more than $380 million. Orr has said long-term debt was more than $14 billion and could be between $17 billion and $20 billion.

Click for More at the Detroit Free Press

The Associated Press contributed to this report.

Read more: http://www.foxnews.com/politics/2013/07/18/detroit-files-for-largest-municipal-bankruptcy-in-us-history/#ixzz2ZRF4lwKb

Read more: http://www.foxnews.com/politics/2013/07/18/detroit-files-for-largest-municipal-bankruptcy-in-us-history/#ixzz2ZREx76Pp

Historic Day: Detroit Files For Bankruptcy

July 18, 2013 5:51 PM

Vickie Thomas

Vickie Thomas

Reporting Vickie Thomas

DETROIT (WWJ) – After years of hand wringing over the state of affairs in the rust belt hub that has struggled in recent years perhaps more than any other large city in America, it’s official: Detroit has filed for Chapter 9 bankruptcy protection.

Motown, the gritty place that pioneered automobiles, modern manufacturing and soul music, now has the largest municipal bankruptcy case in U.S. history.

The 16-page filing was submitted to federal U.S. Bankruptcy Court Thursday afternoon with no announcement from the city or state.

Detroit has been struggling, crushed under billions of dollars in debt following decades of mismanagement, population flight and loss of tax revenue. The city lost a quarter-million residents between 2000 and 2010. Detroit now has an estimated 700,000 residents; down from 1.8 million in the 1950s.

No Federal Government Bailout In The Works For Detroit

Detroit City Councilwoman JoAnn Watson speaks at rally calling for moratorium on Detroit's debt to the banks May 4, 2013.

Detroit City Councilwoman JoAnn Watson speaks at rally calling for moratorium on Detroit’s debt to the banks May 4, 2013. She has also called for a federal bail-out and a $10 billion Marshall Plan for Detroit.

For weeks, emergency manager Kevyn Orr has been working to try to lower the city’s debt as he slashes budgets, works with unions, and make sense of Detroit’s disjointed financial records.

A city official notably said the federal government should bail out Detroit, though the president has made no indication that’s a possibility.

Orr’s options were these: File for bankruptcy or cut the biggest bond restructuring deal of all time.

The latter didn’t happen.

Said Orr, in a written recommendation hand-delivered Tuesday to Gov. Rick Snyder and state Treasurer Andy Dillon:

“Based on the current facts and circumstances, I have concluded that no reasonable alternative to rectifying the city’s financial emergency exists other than the confirmation of a plan of adjustment for the city’s debts pursuant to chapter 9 of the bankruptcy code because the city cannot adopt a feasible financial plan that cant satisfactorily rectify the financial emergency outside of a chapter 9 process in a timely manner.” [View a copy of Orr’s letter].

Gov. Snyder on Thursday approved the bankruptcy

Detroit Mayor Dave Bing with State Treasurer Andy Dillon, both allies of Gov. Snyder.

Detroit Mayor Dave Bing with State Treasurer Andy Dillon, both allies of Gov. Snyder.

“Only one feasible path offers a way out,” Snyder wrote in a letter to Dillon and Orr.

“The citizens of Detroit need and deserve a clear road out of the cycle of ever-decreasing services,” Snyder said. “The city’s creditors, as well as its many dedicated public servants, deserve to know what promises the city can and will keep. The only way to do those things is to radically restructure the city and allow it to reinvent itself without the burden of impossible obligations.”

“Despite Mr. Orr’s best efforts, he has been unable to reach a restructuring plan with the city’s creditors,” Snyder said. “I therefore agree that the only feasible path to a stable and solid Detroit is to file for bankruptcy protection.” [View a copy of the letter].

According to sources talking to WWJ City Beat Reporter Vickie Thomas, city officials were preparing the filing earlier Thursday. Federal Court spokesman Ron Hansen confirmed the filing shortly after 4 p.m.

Meantime, one mayoral candidate says Orr’s numbers are not adding up.

Mayoral candidate Krystal Crittendonl

Mayoral candidate Krystal Crittendonl

Krystal Crittendon, an attorney for the city, is criticizing the math in Orr’s latest financial report. She said the Washington-based bankruptcy attorney’s numbers do not add up.

“The whole foundation that brings him here is false,” Crittendon said. “We do not have a $15 [billion] or a $20 billion debt problem. We have less than a $2 billion short-term debt problem that we could manage if we just went out and collected revenues that are owed to the city; stop giving, you know, tax abatement to people who can actually afford to pay taxes.”

Orr was hired by the state in March after a financial emergency was declared in Detroit.

Following a meeting last month with Wall Street creditors, Orr estimated Detroit’s budget deficit at $380 million, and the city’s long-term debt at $20 billion. Creditors are being asked to take about 10 cents on the dollar of what’s owed to them. [VIEW THE PROPOSAL HERE]

At that time, Orr gave the city a 50-50 chance of avoiding bankruptcy.

Bankruptcy expert Douglas Bernstein, with West Bloomfield’s Plunkett Cooney Law Firm, said the filing will kick-start a multi-month period where a federal judge and consultants would determine whether Detroit is eligible for Chapter 9 protection.

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