VOICE OF DETROIT: The city's independent newspaper, unbossed and unbought

Lennette Williams (in white top) with her attorney Allison Folmar behind her; (l to r) supporters Elaine Steele, Anita Peek, Arnetta Grable after pending victory in court Oct. 9, 2014/Photo by Cornell Squires

Mailauni secretly kept with Rowan aide, then sister; no court order

 Judge Terrance Keith says he will reunite Mailauni with mother after interim guardianship by sister

 Attorney Allison Folmar working to finalize return by Nov. 12 

Mailauni Williams

DETROIT — Saying, “True love never fails against the greatest obstacles,” Wayne County Probate Court Judge Terrance Keith removed attorney Mary Rowan as guardian for Mailauni Williams, 32, and appointed her sister Monique Williams as “interim” guardian. He said his ultimate intent is to send Mailauni back home with her mother Lennette Williams, with whom she has spent her entire life.

Grosse Pointe Farms police seized her from her home in May, after a cursory visit by Adult Protective Services, but no evident court order.

Mailauni was born with cerebral palsy and other injuries resulting from medical malpractice at her birth, which also caused permanent physical damage to her mother. Henry Ford Hospital agreed to a settlement that, spread over the years, would amount to $30 million.

“I love my daughter and have always taken care of her,” Williams tearfully told Judge Keith. “I need my daughter back and she needs me. I would die for my daughter. She is my hero. There are those who thought the hospital settlement was too much for people of color.”

(L to r) Mailauni and Lennette Williams, Arnetta Grable, Cornell Squires were among many who testified at Board of Police Commissioners about police brutality. Mailauni, with her mother, has been active in many such activities all her life.

Judge Keith said he had seen records indicating that doctors expected Mailauni to live only two and a half years at most, and that he was impressed both by Lennette Williams dedication in nurturing her daughter to adulthood, and by her professional pro see court filings in response to court-appointed attorneys and guardians attempts to take her away for 20 years.

“I used to take her to the doctor, and he told me I did not have an M.D.,” Williams said. “But I have something better called love. God was working through me. Mailauni walked at 5, and danced to the music of Michael Jackson.” Mailauni later graduated from Grosse Pointe High School. Her graduation portrait is proudly displayed on the mantel of her home in Grosse Pointe Farms.

Mailauni began visiting civil rights icon Rosa Parks at the age of five. Parks adopted her as her godchild.  Elaine Steele and Anita Peek of the Raymond and Rosa Parks Foundation have been active in advocating for her return to her mother. Arnetta Grable of the Original Detroit Coalition Against Police Brutality and Cornell Squires of We the People for the People are also close friends supporting Mailauni’s return home.

Wayne County Chief Probate Court Judge Milton Mack, Jr.

Macomb County Judge Kathryn George

For the last eight years, Macomb County Judge Kathryn George presided over the case, at the request of Wayne County Probate Court Chief Judge Milton Mack, Jr.

Subsequent to a bizarre hearing in June during which George appointed Rowan as guardian with for at least a year, jailed Lennette Williams, eliminated estate payments for hers and Mailauni’s needs, and had her own court clerk testify as a sworn-in witness, Attorney Allison Folmar got George removed from the case. George had previously been removed as Macomb County Chief Probate Judge after well-publicized allegations of financial malfeasance. She was barred then from dealing with cases involving estates and trusts.

George had also threatened to jail Folmar during the June hearing.

Keith asked Rowan Oct. 9 how she had come to be appointed as guardian. During the June hearing, Mailauni’s sister Monique Williams asked to be appointed as an alternative to foster care home placement. Her mother and a court-appointed attorney said guardianships should go to family members if possible, and the sister said she was confident that Mailauni would also do well with her mother.

Mary Rowan (seated in blue) grabs Maulauni’s arm after court hearing in June, one day before she and an aide took her to unknown locations for three months.

“I was contacted by the Court Administrator’s office and asked to step in,” Rowan told Keith. Rowan was seen by this reporter handling several other probate hearings two days earlier, prior to the hearing on the Gayle Robinson case, where Rowan was also appointed temporary guardian. (Story on that below.)

The day after her appointment, Rowan and her aide went to the Faith Connections home on E. Grand Blvd. where Mailauni had been staying, and according to staff there, alleged they were going to take her shopping. They had no court order to remove her.

Mailauni then disappeared. Her mother said she was frantic, not knowing if her daughter was receiving her medications and other care. During the June hearing, Mailauni had begged to go home and said she was worried about her mother after police had damaged her home when she was taken.

As guardian, Rowan would only allow visits with her sister “in a public place,” but no one knew where she was living until three months later, on Sept. 6, attorney Folmar said.

Wayne Co. Probate Court Judge Terrance Keith

At Keith’s direction, Rowan and others met with Folmar prior to the hearing. Folmar was finally told that Mailauni first stayed with Rowan’s assistant, who they alleged was qualified because she has an autistic son. Then she was moved to her sister Monique’s home in Hazel Park. Rowan allegedly exacted a pledge from the sister not to reveal her whereabouts, under threat of removing her again.

Monique Williams did not bring Mailauni to this hearing, although a Faith Connections worker brought her to the June hearing, where she expressed her desire to go home to her mother. During the Oct. 9 hearing, Rowan and her aide asked to see Mailauni even if Rowan was no longer the guardian, based on their brief acquaintance, evidently.

Keith did not rule on that request. He said the original order by George was illegal, because a change in guardianship can only be barred for a period of six months, and therefore he was dissolving that order.

He asked Folmar to file a motion for funds to be released from a State of New York settlement of the bankruptcy filed by the insurance company handling the Williams settlement, in the amount of $869,000. Folmar and Williams said the funds were needed for urgent repairs to the stove, refrigerator, and other portions of the 30-year-old home, to allow Mailauni to return to adequate housing.

Keith said that once a satisfactory inspection was done of the home was done, he would order Mailauni Williams brought back home to her mother and cancel outside guardianships. A hearing on that matter is set for Wed. Nov. 12 at 11 a.m.

Gayle L. Robinson, 83, seized from home Oct. 1 against her wishes  

Medicated at Botsford Hospital for eight days before return home with son

Rowan recently removed as guardian in case of Mailauni Williams 

By Diane Bukowski 

Update March 2, 2016: VOD is clarifying that the headline for this story relates (clearly) only to Mary Rowan, not to any other individuals cited in the story. After a complaint from an attorney for Dr. Marlana Geha, her picture and caption have been removed from this story, in the portion citing a complaint filed with the Wayne County Probate Court Ombudsman’s office regarding Robert Kilgore, Jr. It is also noted by request of the attorney that Dr. Geha acted in his case under court order. Mr. Kilgore passed since this story was written, in Sept. 2015. The videos included here have been downloaded from the Facebook site “Free Gayle From Probate” after earlier Youtube versions were removed from that site.

Mary Rowan (seated in blue), grabs Mailauni Williams’ arm (standing in blue) after being appointed guardian last May. She took Mailauni from her court-ordered placement and kept her for months away from her family, friends and attorney at undisclosed locations, also without a court order.

Oct. 18, 2014 – Shocking videos show Westland police and Katie McDonald, alleged assistant to temporary guardian/conservator Mary Rowan, seizing Gayle Robinson, 83, from her home Oct. 1 without a court order. In the videos, Mrs. Robinson says she does not want to go and does not like attorney Rowan. After two hours of debate, the officers and assistant took her to a location not disclosed to her son Randy Robinson, who lives with her, or her daughter Deborah Fox, who was present during the seizure.

Rowan is the same attorney involved as temporary guardian in the Mailauni Williams case, which VOD has been covering. She has since been removed after it came to light that she was appointed by disgraced former Macomb County Chief Probate Judge Kathryn George. At the request of Wayne County Probate Chief Judge Milton Mack, George had been serving in Wayne County on the Williams case for eight years. She is no longer there.

After an Oct. 7 probate court hearing regarding Mrs. Robinson in front of Judge Terrence Keith, VOD asked Sgt. Randall Thivierge of the Westland Police (tall bald man seen talking at length in video above) whether he had a court order to seize Mrs. Robinson. He said, “I didn’t need one. She came willingly.”

But the videos show at least two hours of discussion, with Mrs. Robinson stating clearly, “I don’t like Mary Rowan,” and that she did not want to leave. An Adult Protective Services worker and her former court-appointed attorney Ella Bully-Cummings testified during the hearing that Mrs. Robinson told them she wanted to remain in her home and that she did not have a problem with her son Randy staying there.

Attorney Ella Bully-Cummings

“What I can say is that when I talked to [Mrs. Robinson] she was calm and not agitated,” Cummings said. “She did indicate she wants to be at home, and that she doesn’t want a guardian. She said her children had stolen money from her. But she said neither Randy nor [daughter] Deborah had.”

According to testimony, Mrs. Robinson was taken to Botsford Hospital in Farmington Hills afterwards, where she was held in the psychiatric ward. She was not immediately admitted because she did not want to be, and due to alleged “paperwork” problems. In the meantime, she has since told her son Randy, she stayed overnight in a hotel.

At an earlier show cause hearing, Keith ordered that Robinson not be removed from her home without his express order. On Oct. 7, he ordered that she be returned promptly to her home after a medical evaluation was completed by Dr. Marlana Geha, a psychologist, but did not sanction Rowan or the police for earlier removing her without his order.  He ordered that a home health care nurse visit Mrs. Robinson at her home, and that Geha see her in her office, subsequent to her return home.

He denied requests by other siblings present to evict Randy Robinson from the home.

Wayne County Probate Court Judge Terrance Keith and his book “Sunrise on the Detroit River”

“I stand firm that she is not to be placed in a nursing home or other facility without the court’s prior written order,” Keith said. In response to references to a dispute over a home equity loan taken out by another sibling on Mrs. Robinson’s house, he ordered that any funds taken involuntarily from Mrs. Robinson by her children be returned at once.

Randy Robinson, who has petitioned the court numerous times to remove Rowan as guardian, told VOD later, “They brought my mother home Oct. 9 without any notice; they didn’t even know if I was home. She didn’t have her keys and wouldn’t have been able to get in. Just luckily I was there.”

He said that his mother appeared to have been drugged at the hospital, although she prefers natural remedies, and is suffering from the trauma of her removal. Westland police had assured her she was only going for a check-up and would be back shortly. He also told VOD that the home’s electricity was recently shut off for non-payment of its DTE bill by Rowan and that other bills remain unpaid.

Normally, according to several probate attorneys, a family member is the first choice for guardianship for an individual deemed to be legally incapacitated and a “protected person.”

At the Oct. 7 hearing, Keith said he had ordered an “Independent Medical Evaluation” (IME) of Mrs. Robinson and was angry that it had not been carried out. However, he reviewed medical documentation of an evaluation from Henry Ford Hospital physicians, where her son Randy had taken her at the recommendation of his mother’s family doctor.

The HFH records showed her to be competent and in good mental health. But Judge Keith ordered that another evaluation, including her past history, should  be completed by Dr. Geha. There had been claims she was earlier diagnosed with dementia.

Robert “Country” Kilgore, Jr. Obituary photo

The Wayne County Probate Court website shows that Dr. Geha has 125 open guardianship cases, and a total of over 500 cases including those that are closed. Among them was the case of Robert Kilgore, Jr., now 81 (update–Kilgore passed away in Sept. 2015). Wayne County Probate Court Chief Judge Milton Mack appointed Dr. Geha as guardian and Robert Findling as conservator.

According to a complaint filed with the Court Ombudsman’s office, Geha moved Kilgore from his home in Sumpter Township to the Belle River Pines Adult Foster Care Home in Memphis, Michigan, 77 miles away from his close friends and the VA facility where he was receiving care. The move was supposedly temporary.

Dr. Geha’s attorney Gregory Yatooma has told VOD that Dr. Geha’s action was taken under order of the court.

According to the complaint, Mack then authorized the sale of Kilgore’s house for $76,000 in 2009 without Kilgore’s knowledge, and Kilgore said $162,600 in assets disappeared. He had been receiving income from Social Security, the VA, and a GM pension, but was left without money even for personal needs, according to the complaint. The complaint is published on the Stop Guardian Abuse website at http://stopguardianabuse.org/victim-profiles/robert-kilgorejr-mi/.  The link also lists the complainant’s name,  Linda M. Lambert, and associated organization, the Michigan Advocacy Project.

Attorney Yatooma on behalf of Dr. Geha has denied the allegations in the complaint, and is to be forwarding related documents to Voice of Detroit.

Judge Keith did not rule on Randy Robinson’s most recent motion to remove Rowan as his mother’s guardian.

During the hearing, Rowan insisted several times that she would have Mrs. Robinson visit with her other children in “public places,” and would “see to it that she gets to the doctor’s office” for follow-up care. Mrs. Robinson, however, states clearly in the video above that she does not want to see her other children because they have stolen money from her.

Video above shows Gayle Robinson competently working and playing despite contrary evaluations of her by court-appointed individuals.

From Rowan’s recent behavior in the case of Mailauni Williams, there is reason for alarm here.

One day after her appointment as Williams’ guardian by Judge Kathryn George, Rowan and an assistant took Mailauni from her court-ordered placement in a Detroit adult foster care home, claiming they were taking her shopping. She disappeared for months, with her mother Lennette Williams and Mailauni’s attorney Allison Folmar not informed of her whereabouts. After getting the case transferred from George to Keith, Folmar met with opposing parties and discovered that Mailauni had been staying for a while with McDonald, who is not licensed for adult foster care, then was moved to her sister’s house. There is no court order for either placement on the record. (See updated report on that case in story to follow.)

The next hearing in Gayle Robinson’s case is set for Tues. November 25.

Related website: http://stopguardianabuse.org/

Related stories, in case where Mary Rowan was also the guardian, appointed by disgraced former Macomb County Probate Court Chief Judge Kathryn George:

http://voiceofdetroit.net/2014/07/21/amber-alert-rosa-parks-godchild-mailauni-williams-missing-judge-kathryn-george-loots-estate-bars-mortgage-payments-on-her-home/

http://voiceofdetroit.net/2014/06/16/shady-probate-judge-kathryn-george-jails-mom-seizes-daughter-and-estate/

VOD update coming shortly on Mailauni Williams case.

Banks, Fannie Mae, Freddie Mac chase the already dispossessed for more

By Michelle Conlin

Reuters

 October 10, 2014

NEW YORK – Many thousands of Americans who lost their homes in the housing bust, but have since begun to rebuild their finances, are suddenly facing a new foreclosure nightmare: debt collectors are chasing them down for the money they still owe by freezing their bank accounts, garnishing their wages and seizing their assets.

ZOMBIE DEBTS

By now, banks have usually sold the houses. But the proceeds of those sales were often not enough to cover the amount of the loan, plus penalties, legal bills and fees. The two big government-controlled housing finance companies, Fannie Mae and Freddie Mac, as well as other mortgage players, are increasingly pressing borrowers to pay whatever they still owe on mortgages they defaulted on years ago.

Using a legal tool known as a “deficiency judgment,” lenders can ensure that borrowers are haunted by these zombie-like debts for years, and sometimes decades, to come. Before the housing bubble, banks often refrained from seeking deficiency judgments, which were seen as costly and an invitation for bad publicity. Some of the biggest banks still feel that way.

But the housing crisis saddled lenders with more than $1 trillion of foreclosed loans, leading to unprecedented losses. Now, at least some large lenders want their money back, and they figure it’s the perfect time to pursue borrowers: many of those who went through foreclosure have gotten new jobs, paid off old debts and even, in some cases, bought new homes.

Detroiters commemorate anniversary of MLK March on Washington Aug. 28, 2011, demand moratorium on evictions and foreclosures

“Just because they don’t have the money to pay the entire mortgage, doesn’t mean they don’t have enough for a deficiency judgment,” said Florida foreclosure defense attorney Michael Wayslik.

Advocates for the banks say that the former homeowners ought to pay what they owe. Consumer advocates counter that deficiency judgments blast those who have just recovered from financial collapse back into debt — and that the banks bear culpability because they made the unsustainable loans in the first place.

“SLAPPED TO THE FLOOR”

Borrowers are usually astonished to find out they still owe thousands of dollars on homes they haven’t thought about for years.

In 2008, bank teller Danell Huthsing broke up with her boyfriend and moved out of the concrete bungalow they shared in Jacksonville, Florida. Her name was on the mortgage even after she moved out, and when her boyfriend defaulted on the loan, her name was on the foreclosure papers, too.

Danell Huthsing/Facebook photo

She moved to St. Louis, Missouri, where she managed to amass $20,000 of savings and restore her previously stellar credit score in her job as a service worker at an Amtrak station.

But on July 5, a process server showed up on her doorstep with a lawsuit demanding $91,000 for the portion of her mortgage that was still unpaid after the home was foreclosed and sold. If she loses, the debt collector that filed the suit can freeze her bank account, garnish up to 25 percent of her wages, and seize her paid-off 2005 Honda Accord.

“For seven years you think you’re good to go, that you’ve put this behind you,” said Huthsing, who cleared her savings out of the bank and stowed the money in a safe to protect it from getting seized. “Then wham, you get slapped to the floor again.”

Bankruptcy is one way out for consumers in this rub. But it has serious drawbacks: it can trash a consumer’s credit report for up to ten years, making it difficult to get credit cards, car loans or home financing. Oftentimes, borrowers will instead go on a repayment plan or simply settle the suits — without questioning the filings or hiring a lawyer — in exchange for paying a lower amount.

Though court officials and attorneys in foreclosure-ravaged regions like Florida, Ohio and Illinois all say the cases are surging, no one keeps official tabs on the number nationally. “Statistically, this is a real difficult task to get a handle on,” said Geoff Walsh, an attorney with the National Consumer Law Center.

Officials in individual counties say that the cases, while virtually zero a year or two ago, now number in the hundreds in each county. Thirty-eight states, along with the District of Columbia, allow financial institutions recourse to claw back these funds.

“I’ve definitely noticed a huge uptick,” said Cook County, Illinois homeowner attorney Sandra Emerson. “They didn’t include language in court motions to pursue these. Now, they do.”

“A CURSE”

Three of the biggest mortgage lenders, Bank of America, Citigroup, JPMorgan Chase & Co and Wells Fargo & Co., all say that they typically don’t pursue deficiency judgments, though they reserve the right to do so. “We may pursue them on a case-by-case basis looking at a variety of factors, including investor and mortgage insurer requirements, the financial status of the borrower and the type of hardship,” said Wells Fargo spokesman Tom Goyda. The banks would not comment on why they avoid deficiency judgments.

BIGGEST ZOMBIE DEBT PURSUERS, NOW RUN BY THE FEDERAL GOVERNMENT

Perhaps the most aggressive among the debt pursuers is Fannie Mae. Of the 595,128 foreclosures Fannie Mae was involved in – either through owning or guaranteeing the loans – from January 2010 through June 2012, it referred 293,134 to debt collectors for possible pursuit of deficiency judgments, according to a 2013 report by the Inspector General for the agency’s regulator, the Federal Housing Finance Agency.

It is unclear how many of the loans that get sent to debt collectors actually get deficiency judgments, but the IG urged the FHFA to direct Fannie Mae, along with Freddie Mac, to pursue more of them from the people who could repay them.

It appears as if Fannie Mae is doing just that. In Florida alone in the past year, for example, at least 10,000 lawsuits have been filed — representing hundreds of millions of dollars of payments, according to Jacksonville, Florida-based attorney Chip Parker.

Parker is about to file a class action lawsuit against the Dallas-based debt collection company, Dyck O’Neal, which is working to recoup the money on behalf of Fannie Mae. The class action will allege that Dyck O’Neal violated fair debt collection practices by suing people in the state of Florida who actually lived out of state. Dyck O’Neal declined to comment.

Atty. Chip Parker is fighting zombie foreclosure debts in Florida class action lawsuit.

In Lee County, Florida, for example, Dyck O’Neal only filed four foreclosure-related deficiency judgment cases last year. So far this year, it has filed 360 in the county, which has more than 650,000 residents and includes Ft. Myers. The insurer the Mortgage Guaranty Insurance Company has also filed about 1,000 cases this past year in Florida alone.

Andrew Wilson, a spokesman for Fannie Mae, said the finance giant is focusing on “strategic defaulters:” those who could have paid their mortgages but did not. Fannie Mae analyzes borrowers’ ability to repay based on their open credit lines, assets, income, expenses, credit history, mortgages and properties, according to the 2013 IG report. “Fannie Mae and the taxpayers suffered a loss. We’re focusing on people who had the ability to make a payment but decided not to do so,” said Wilson.

Freddie Mac spokesman Brad German said the decision to pursue deficiency judgments for any particular loan is made on a “case-by-case basis.”

The FHFA declined to comment.

But homeowner-defense lawyers point out that separating strategic defaulters from those who were in real distress can be tricky. If a distressed borrower suddenly manages to improve their financial position – by, for example, getting a better-paying job – they can be classified as a strategic defaulter.

Dyck O’Neal works with most national lenders and servicing companies to collect on charged-off residential real estate. It purchases foreclosure debts outright, often for pennies on the dollar, and also performs collections on a contingency basis on behalf of entities like Fannie Mae. “The debt collectors tend to be much more aggressive than the lenders had been,” the National Consumer Law Center’s Walsh said. Continue reading →

Former Detroit Water and Sewerage Dept. worker Derek Grigsby and family participate in protest against bankruptcy,

Detroit’s bankruptcy is a model for how wealthier and whiter Americans escape the costs of public goods they’d otherwise share with poorer and darker Americans. Are Detroit, its public employees, poor residents, and bondholders the only ones who should sacrifice when ‘Detroit’ can’t pay its bills? Or does the relevant sphere of responsibility include Detroit’s affluent suburbs?

 By Robert Reich, Robertreich.org 

September 8, 2014

Rich suburban families prosper while Black Detroit families suffer.

Detroit is the largest city ever to seek bankruptcy protection, so its bankruptcy is seen as a potential model for other American cities now teetering on the edge.

But Detroit is really a model for how wealthier and whiter Americans escape the costs of public goods they’d otherwise share with poorer and darker Americans.

Judge Steven W. Rhodes of the U.S. Bankruptcy Court for the Eastern District of Michigan is now weighing Detroit’s plan to shed $7 billion of its debts and restore some $1.5 billion of city services by requiring various groups of creditors to make sacrifices.

Recommended: How skewed is America’s income inequality? Take our quiz.

Among those being asked to sacrifice are Detroit’s former city employees, now dependent on pensions and healthcare benefits the city years before agreed to pay. Also investors who bought $1.4 billion worth of bonds the city issued in 2005.

Both groups claim the plan unfairly burdens them. Under it, the 2005 investors emerge with little or nothing, and Detroit’s retirees have their pensions cut 4.5 percent, lose some health benefits, and do without cost-of-living increases.

Home on Carroll Lake, Oakland County, MI

No one knows whether Judge Rhodes will accept or reject the plan. But one thing is for certain. A very large and prosperous group close by won’t sacrifice a cent: They’re the mostly-white citizens of neighboring Oakland County.

Oakland County is the fourth wealthiest county in the United States, of counties with a million or more residents.

In fact, Greater Detroit, including its suburbs, ranks among the top financial centers, top four centers of high technology employment, and second largest source of engineering and architectural talent in America.

The median household in the County earned over $65,000 last year. The median household in Birmingham, Michigan, just across Detroit’s border, earned more than $94,000. In nearby Bloomfield Hills, still within the Detroit metropolitan area, the median was close to $105,000.

Lahser HIgh School, Bloomfield Hills, MI

Detroit’s upscale suburbs also have excellent schools, rapid-response security, and resplendent parks.

Forty years ago, Detroit had a mixture of wealthy, middle class, and poor. But then its middle class and white residents began fleeing to the suburbs. Between 2000 and 2010, the city lost a quarter of its population.

By the time it declared bankruptcy, Detroit was almost entirely poor. Its median household income was $26,000. More than half of its children were impoverished.

That left it with depressed property values, abandoned neighborhoods, empty buildings, and dilapidated schools. Forty percent of its streetlights don’t work. More than half its parks closed within the last five years.

Foreclosed home in Detroit.

Earlier this year, monthly water bills in Detroit were running 50 percent higher than the national average, and officials began shutting off the water to 150,000 households who couldn’t pay the bills.

Official boundaries are often hard to see. If you head north on Woodward Avenue, away from downtown Detroit, you wouldn’t know exactly when you left the city and crossed over into Oakland County — except for a small sign that tells you.

But boundaries can make all the difference. Had the official boundary been drawn differently to encompass both Oakland County and Detroit – creating, say, a “Greater Detroit” – Oakland’s more affluent citizens would have some responsibility to address Detroit’s problems, and Detroit would likely have enough money to pay all its bills and provide its residents with adequate public services.

Oakland Co. Exec. L. Brooks Patterson at press conference announcing selloff of Detroit Water and Sewerage Department to regional authority, under current bankruptcy plans.

But because Detroit’s boundary surrounds only the poor inner city, those inside it have to deal with their compounded problems themselves. The whiter and more affluent suburbs (and the banks that serve them) are off the hook.

Any hint they should take some responsibility has invited righteous indignation. “Now, all of a sudden, they’re having problems and they want to give part of the responsibility to the suburbs?” scoffs L. Brooks Paterson, the Oakland County executive. “They’re not gonna’ talk me into being the good guy. ‘Pick up your share?’ Ha ha.”

Buried within the bankruptcy of Detroit is a fundamental political and moral question: Who are “we,” and what are our obligations to one another?

Are Detroit, its public employees, poor residents, and bondholders the only ones who should sacrifice when “Detroit” can’t pay its bills? Or does the relevant sphere of responsibility include Detroit’s affluent suburbs — to which many of the city’s wealthier resident fled as the city declined, along with the banks that serve them?

Judge Rhodes won’t address these questions. But as Americans continue to segregate by income into places becoming either wealthier or poorer, the rest of us will have to answer questions like these, eventually.

U.S. Bankruptcy Judge Steven Rhodes (center) at one-sided forum on Emergency Managers and Chapter 9 bankruptcy, on Oct. 10, 2012, one year before bankruptcy trial. Forum featured (l to r) Frederick Headen of state treasurer’s office, who boasted he had put dozens of cities under state control; Edward Plawecki; Douglas Bernstein and Judy O’Neill, both trainers of EM’s, O’Neill also a co-author of EM law PA 4; Charles Moore of Conway McKenzie, chief witness for Detroit EM Kevyn Orr at bankruptcy trial.

Click on Rasmea-Flyeract to download the complete flyer, with support activities.

Injustice in Detroit: Ruling paves way for repressive climate at Rasmea Odeh trial; pack Judge Drain’s court, October 21, 231 W. Lafayette, Rm. 110, support esteemed Palestinian leader Oct. 21

By Rasmea Defense Committee

October 18, 2014

U.S. District Court Judge Gershwin Drain

On October 16, Judge Gershwin Drain made an important ruling in the case of Palestinian American leader Rasmea Odeh. At issue was a bizarre motion by the prosecution that characterized the efforts of the Rasmea Defense Committee as “jury tampering” and “almost certainly criminal.”

While we are pleased that Judge Drain rejected the “Anonymous Jury” motion from the prosecution, we are still very concerned about the ruling to allow partial sequestration. The decision to have the jury meet at a secret location, and drive to the courthouse in a sealed van, creates a militarized and security state atmosphere that will cause apprehension amongst the jury members, and prompt them to believe that Rasmea is somehow dangerous. She is innocent, and this ruling does not guarantee her a fair trial.

Rasmea has done nothing wrong and the trumped up immigration charges against her should be dropped. She is an iconic leader in the Palestinian community of Chicagoland, the U.S., and the world. Forty-five years ago, she was jailed and tortured by the Israeli authorities. That she is facing jail again, this time at the hands of Detroit’s U.S. Attorney, Barbara McQuade, is nothing short of shameful.

U.S. Attorney Barbara McQuade at Detroit police press conference June 30, 2013. The FBI, under the Justice Dept., had just assassinated Black Muslim leader Imam Luqman Abdullah in Dearborn in 2009.

The prosecution’s talk about “jury tampering” is an attempt at intimidation and an act of desperation. McQuade’s office is trying to criminalize activities protected by the first amendment, like protesting outside the courthouse and calling the Department of Justice to demand the charges against Rasmea be dropped.

We urge all supporters of civil liberties and Rasmea Odeh to join us in Detroit for her next hearing October 21 at 11 a.m. before Judge Drain in the U.S. District Court at 231 W. Lafayette, Room 110. Rasmea’s trial starts November 4. Let’s pack the courtroom!

Drop the charges against Rasmea Odeh!

www.uspcn.organd www.stopfbi.net for more information

Media Contact: Hatem Abudayyeh, 773.301.4108, hatem85@yahoo.com

MWRO STATEMENT ON BANKRUPTCY COURT DENIAL OF DETROIT HUMAN RIGHT TO WATER

 Monday, September 29, 2014

MWRO’s statement on today’s decision by the federal bankruptcy court NOT to stop residential water shut-offs, restore water to residential customers without water, NOR implement a water affordability based on fixed incomes for low-income seniors, families with children and persons with disabilities:

Of course, we are not surprised that our capacity to seek relief from the Federal Courts no longer exists! The fact that low income customers were ushered into court and testified how miserable their lives were because water was cut-off without an option for them to make arrangements with the DWSD could not have impacted the Court because the Court concentrated on what the 1% needed to continue their reign of terror tied to the Emergency Manager and this bankruptcy ploy.

International protest against Detroit water shut-offs in downtown Detroit July 18, 2014.

This is the humanitarian crisis of our times here in America, where every step we take is being analyzed to see which fights we launch as the corporate class encroaches on our standard of living. Denying specific populations access to clean drinking water was today deemed legal even though rich and wealthy water customers receive a different standard of treatment. Millions are owed by these corporate pirates while $150 and two months behind is the rule applied to our constituency — a position clearly supported by the Federal Court. 

Poor people, their children, seniors, the disabled, veterans — it doesn’t matter — if you can’t pay for water, you can’t have it. Go to the river with a bucket and get what you need still remains the sentiment by this draconian class and they have no shame in taking this position. This sham court-case was just that…a plot to look like justice would prevail if we just had a chance to plead our case. The answer was always going to be NO!!!

So what are we going to do…give up the fight for social justice? We think not!

Protesters block water shut-off trucks from leaving Homrich facility July 18, 2014.

In the movie, The Untouchables, the question was asked, “What are you prepared to do about this??” When brilliant lawyers went to court to file suit against slavery, and against lynching, at first the Court said “NO”…there is no enforceable right to not be lynched if that is the custom in that area of the country! The Court’s explained that with the laws on the books at that time, Blacks, Hispanics, Native Americans, women, children, and other oppressed folks should be able to manage their lives and avoid pain and suffering, and if not, they had every right to return to Court! Madness and Madness today!

Our case demonstrated great attorneys, courageous plaintiffs, determined advocates versus conservative, corporate courts who prefer the company of the rich & famous and will not rock the “status quo.” We march on…

Maureen D. Taylor

State Chairperson – MI Welfare Rights Org 

RELATED:

DB adversary complaint water shutoffs 7 21 14

DB DAREA objection re water shutoffs

BANKRUPCY JUDGE SAYS NO ENFORCEABLE RIGHT TO FREE AND AFFORDABLE WATER–By Curt Guyette

http://voiceofdetroit.net/2014/08/26/detroiters-ask-judge-to-bar-water-shut-offs-until-lawsuit-resolved-hearing-tues-sept-2/

http://voiceofdetroit.net/2014/08/03/detroit-water-shut-offs-city-takeover-still-on-full-blast/

http://voiceofdetroit.net/2014/07/16/detroit-bankruptcy-bombshells-water-shut-offs-false-retiree-ballots-natl-rally-july-18-court-july-21/

http://voiceofdetroit.net/2014/07/10/pastors-community-leaders-arrested-blocking-homrich-gates-to-stop-detroit-water-shut-offs/

http://voiceofdetroit.net/2014/06/25/stop-water-shut-offs-detroiters-take-demand-to-united-nations/

http://voiceofdetroit.net/2014/05/28/mass-water-shut-offs-mass-incarceration-at-mound-road-prison-for-protesters/

People’s Water Board Coalition protests outside Water Board building in downtown Detroit in 2012.

PEOPLE’S WATER BOARD COALITION CALLS REGIONAL WATER AUTHORITY AN ASSAULT AGAINST DEMOCRACY AND THE HUMAN RIGHT TO WATER

 Community calls for protection and representation for all region’s residents

Lynna Kaucheck, Food & Water Watch, (586) 556-8805

Tawana Petty, People’s Water Board, (313) 433-9882

Sept. 10, 2014 

Detroit Mayor Mike Duggan, flanked by officials from Wayne, Oakland and Macomb Counties, announces plan to take DWSD from people and workers of Detroit. Photo: Diane Bukowski

Detroit, Mich. – The People’s Water Board decried Mayor Mike Duggan’s plan to create a regional water authority as undemocratic and a threat to the human right to water for many in the region. We have access to the largest body of surface freshwater in the world, so it would seem abundance and access should not be an issue. However the manner of governing this valuable resource as responsible environmental stewards for the world has left many communities without trust.

The deal was negotiated behind closed doors without any input from the public and is the next step on the pathway to privatization. It takes away the rights of both the Detroit City Council and the citizens of Detroit to have input on big decisions impacting the system.

“Suburban customers should not be fooled into thinking that this deal gives them more control or influence over the water system,” said Lynna Kaucheck of the People’s Water Board. “The new authority will be made up of unelected officials who are accountable to no one. People need to know that this deal doesn’t take privatization off the table.”

Protesters demand a stop to water privatization.

Veolia Water North America, the largest private water company operating in the United States, has been hired to evaluate the management of the system and clearly has a vested interest in privatization. Privatization typically results in skyrocketing rates, decreased service quality and the loss of jobs. In fact, corporate profits, dividends and income taxes can add 20 to 30 percent to operation and maintenance costs, and a lack of competition and poor negotiation skills can leave local governments with expensive contracts. In the Great Lakes region, large private water companies charge more than twice as much as cities charge for household water service. This is not the solution for Detroit or the region.

 “The regionalization plan is unacceptable. We need a system that is accountable and transparent and that works for all its customers,” said Tawana Petty of the People’s Water Board. “We want an elected board of water commissioners. We want to reduce costs for the region through bulk purchasing and resource sharing. And we want to implement the Affordability Plan as passed by Detroit City Council in 2005. Detroit and suburban leaders need to protect residents and democratize the system.”

The People’s Water Board advocates for access, protection, and conservation of water, and promotes awareness of the interconnectedness of all people and resources.

The People’s Water Board includes: AFSCME Local 207, Baxter’s Beat Back the Bullies Brigade, Detroit Black Community Food Security Network, Detroit Green Party, Detroit People’s Platform, Detroiters Resisting Emergency Management, East Michigan Environmental Action Council, Food & Water Watch, FLOW, Great Lakes Bioneers Detroit, Matrix Theater, Michigan Coalition for Human Rights, Michigan Emergency Committee Against War& Injustice, Michigan Welfare Rights Organization, Rosa and Raymond Parks Institute, Sierra Club, Sisters of Mercy, Voices for Earth Justice and We the People of Detroit.

Related:

http://voiceofdetroit.net/2014/09/10/detroit-bankruptcy-great-lakes-water-authority-to-steal-largest-asset-of-largest-u-s-black-city-4/

http://voiceofdetroit.net/2014/08/21/near-catastrophic-failure-of-detroit-sewage-pumps-caused-detroit-floods-toledo-water-crisis-city-retirees-say/

Lawyers and financial advisors for the City of Detroit (meaning EM Kevyn Orr, seated center) and creditor FGIC, gather with mediator Judge Gerald Rosen (to left of Orr) after reaching proposed deal, at 2 a.m. Oct. 16, 2014. Bloomberg did not even identify Orr in this courtesy photo.

DETROIT CREDITORS SEEKING CASH WILL SETTLE FOR “THE JOE”

By Steven Church and Chris Christoff

Oct 16, 2014 5:47 PM ET Bloomberg

 (Headline at  very top is by Voice of Detroit. VOD analysis in the works. These creditors should instead be going to jail under the RICO act for conspiracy to commit fraud, along with lenders UBS, BOA, SBS Financial, and various others. Former Detroit CFO Sean Werdlow among other city officials should also be indicted. The creditors’ claim is based on the  disastrous $1.5 billion COPS loans of 2005-06. As part of this deal, the “City” –meaning Kevyn Orr/Jones Day–will withdraw its lawsuit against the loan, in which it called the deal “void ab initio, illegal and unenforceable.” In an independent analysis, Wallace Turbeville of DEMOS concurred, and went further to declare the Detroit bankruptcy a hoax.)

Joe Louis Arena (bottom) on valuable Detroit riverfront property.

DETROIT — A milestone agreement in Detroit’s record bankruptcy requires its last major creditors to help revitalize the city’s downtown in return for cutting their losses from a $1.4 billion pension deal that went sour.

Financial Guaranty Insurance Co. would indirectly own and pay to redevelop the riverfront site of Joe Louis Arena — home of the National Hockey League’s Detroit Red Wings — which will be demolished in 2017 when a new arena opens a mile away. FGIC would also get a share of $141.4 million in new notes in a deal announced today in federal court in Detroit.

The agreement brings the city closer to resolving its $18 billion bankruptcy, and would put a group of creditors that includes Aurelius Capital Management LP and and BlueMountain Capital Management LLC, owed about $1.1 billion, in charge of building a hotel and retail space in a downtown that city leaders view as a linchpin of economic recovery.

“There wasn’t any more cash,” Mayor Mike Duggan said in an interview. “They made an assessment that their best chance for a return was to participate in Detroit’s redevelopment.

Mike Duggan gives away DWSD, announcing regional authority Sept. 9, 2014. Photo: Diane Bukowski

‘‘The more successful their development is, the more of their claim they get back. It’s great for both of us.”

The deal is modeled on one the city struck with another bond insurer, Syncora Guarantee Inc. Both companies insured $1.4 billion of pension debt that won’t be repaid under the city’s debt-cutting proposal.

Instead, the bond insurers would collect cash, notes and land that they would use to help pay the pension debt holders. Depending on the structure of the final deal, Aurelius and the other investors would indirectly own from 83 percent to more than 90 percent of the land under the FGIC deal.

No Deal

The debt holders have not yet agreed to a deal, but may do so in the next few days, said their attorney, Thomas Moers Mayer.

Requiring creditors to invest more in the city is at least rare, and may be unprecedented in a municipal bankruptcy, attorney James E. Spiotto said in an interview. The deal resembles a corporate restructuring, he said.

“To some degree it’s a lot like Chapter 11, where they are giving them a chance to buy equity in the debtor,” Spiotto said. “They have to put something into it to get something out.”

Mayer said the arena and its parking garage would be owned by a trust for the benefit of the debt holders and managed by FGIC.

‘The Joe’

Statue of Joe Louis at Cobo Hall, also given away to regional authority, with back turned to wealthy elite celebrating Auto Show Jan. 18, 2013.

Nicknamed “The Joe,” the hulking, windowless edifice was built by the city in the late 1970s to keep the Red Wings from moving to a suburb. It was host for the 1980 Republican National Convention, where Ronald Reagan was nominated candidate for president.

Built as part of a downtown revitalization plan, it now will give way to another one 35 years later.

The redeveloped site would book-end a commercial-entertainment district with a $650 million development anchored by the new hockey arena to the north. That project, led by billionaire Mike Illitch, owner of the Red Wings, also would include a hotel, residential housing and retail establishments.

While Detroit continues to lose population, 10,800 jobs have been added in the central business district since 2010, when 52,100 employees worked in the area, according to the Southeast Michigan Council of Governments.

Clearing Blight

Sculpture in black of Joe Louis’ fist in downtown Detroit. To many Black Americans, Joe Louis represented the defeat of white supremacy, now embodied in “blight (Black) removal” plans.

The settlement would enable Detroit to carry out a rebuilding program that calls for spending of at least $440 million clearing blight from troubled neighborhoods.

During the hearing, Mayer told U.S. Bankruptcy Judge Steven Rhodes that the hedge funds pulled out last night when they learned of a last-minute change in the proposal.

Mayer said in an interview that his clients were ready to join the deal last night when they learned that an upfront cash payment of about $171 million would instead be spread out over several years.

Whether the hedge funds get the payment up front or over time, they are still getting more than what Detroit had initially proposed, Mayer said. The city had estimated pension bondholders would get back no more than about 10 percent of the $1.4 billion they are owed.

FGIC and the bondholders would have three years to build a hotel and the retail center on the site. The development may be completed by 2022, said Corinne Ball, a lawyer for the city.

Three Approvals

FGIC was taken over by the State of New York in 2011, after earlier declaring bankruptcy.

The deal needs at least three approvals before it’s final. New York state regulators that oversee FGIC must sign off, as must the Detroit city council or, if the council rejects it, a Michigan loan board that helps oversee Detroit’s finances. Rhodes has the final say on the settlement and the overall plan, which would shed about $7 billion of debt.

Detroit already reached settlements with other creditors, including public pension systems, under court-supervised mediation in the past year.

Rhodes scheduled a hearing for next week, saying he still plans to hear testimony from a court-appointed expert hired to examine the city’s proposal.

Detroit filed for bankruptcy in July 2013, following decades of decline. The city listed $18 billion in liabilities and said it couldn’t meet its financial obligations while still providing necessary services to the public.

At the center of the plan is an agreement with the state of Michigan and large philanthropies to protect Detroit’s art collection in exchange for hundreds of millions of dollars to shore up public pension funds. Some opponents said the art should be sold or used to secure loans to repay creditors.

FGIC agreed to drop all its objections to the plan under the deal.

“We are happy to report what has seemed like Detroit’s own version of the Gordian knot has been cut,” Ball said today in court. “We now have it done.”

The case is In re City of Detroit, 13-bk-53846, U.S. Bankruptcy Court, Eastern District of Michigan (Detroit).

MayDay protest against Detroit bankruptcy, emergency management blocks Woodward Ave. May 1, 2014.

Say plan is racist attack mounted by state that owes Detroit $1.5 B, vow appeal

Call city’s failure to disclose interest rate on ASF clawbacks fraudulent

Bankruptcy Judge Rhodes more interested in FGIC settlement, trial end

Daily media insults pro se testifiers

By Diane Bukowski

October 16, 2014

Stephen Brogan, head partner at pro- corporate law firm of Jones Day, with Detroit EM Kevyn Orr, its “former employee.”

Detroit—City retirees and citizens, all without lawyers, faced off against Emergency Manager Kevyn Orr and other corporate profiteers in court Oct. 15, as the largest Chapter 9 bankruptcy case in U.S. history proceeded to a close at breakneck speed.

Those who testified had filed objections to the Plan of Adjustment (POA), then compiled motions and briefs, identified witnesses, and stood proudly in court to present their cases. They had been given only one day’s notice, a phone call from the bankruptcy clerk, to appear at the hearing, which lasted about three hours. U.S. Bankruptcy Judge Steven Rhodes had previously killed many other motions by pro se objectors.

“We have stayed the course, and are taking it to the end,” objector Cecily McClellan of the Detroit Active and Retired Employees Association (DAREA), told VOD after the hearing. “We won’t just go away. We have resources and we are planning an appeal, not only for what’s fair and just, but also for leverage. Most judges don’t like being appealed.”

Fredia Butler, a dignified well-dressed senior citizen, who attended the hearing with Stop the Theft of Our Pensions Committee leader Ezza Brandon,  hit the nail on the head during her testimony.

Orr the overseer, Snyder the master

Slavemaster Gov. Rick Snyder takes over Michigan’s Black-majority cities, including Detroit, under Emergency Manager laws.

“This Plan of Adjustment will send many retirees into poverty, people who worked many years with the promise and hope they could live a decent life at the end,” Ms. Butler said. “I am an African-American, and I know from our history that they always put someone who looks like us in charge. Kevyn Orr is the overseer. [Gov. Rick] Synder is the master. Detroit did not have to be placed in bankruptcy. It is a power grab, taking our tax dollars to give to corporations for profit, a planned racist act, involving reductions in pensions, benefits, and unjust clawbacks. . . .[by] Wall Street.”

She also noted the seizures of the city’s assets including the Water Department, Belle Isle, and art owned by the city in the Detroit Institute of Art.

Detroit is the only city in the U.S. undergoing bankruptcy proceedings filed by an unelected official, Orr. Stockton and San Bernadino, CA filed over a year before Detroit did, but have not yet reached the POA stage.

They have so far held off on pension cuts and their bankruptcy plans do not include asset seizures, which are forbidden under Chapter 9 “unless the debtor consents.”

UNBIASED? Judge Rhodes chairs Oct. 10, 2012 forum on Chapter 9 and EM’s with one-sided panel including (l to r) Frederick Headen, state treasury official who has led many takeovers, Edward Plawecki, Emergency Manager trainers Douglas Bernstein and Judy O’Neill (who co-authored Michigan’s original EM law, PA 4), and Charles Moore of Conway McKenzie, a chief witness for Jones Day at the bankruptcy trial.

In this case, U. S. Bankruptcy Judge Steven Rhodes early on recognized Detroit Emergency Manager Kevyn Orr as the debtor, in response to a motion by his “former” employee, Jones Day, which Rhodes recognized as representing the City of Detroit.

U.S. Bankruptcy Judge Steven Rhodes heard the mostly Black objectors as he awaited a settlement with the city’s largest hold-out creditor, Financial Guaranty Insurance Corporation (FGIC), on a claim of $1.1 billion, the following day. He said during the hearing he expected to hold closing arguments by Oct. 21 or 22 next week.

Former two-term City Councilwoman JoAnn Watson said the state has a conflict of interest in “shepherding” Detroit into bankruptcy.

Michigan owes Detroit about $1.5 B, says Councilwoman Watson

“The state is a debtor to the city,” she explained, saying it owes Detroit at least a billion and a half dollars.

JoAnn Watson pleads her case at an earlier Detroit City Council meeting. She and three others voted NO on the consent agreement which led to the appointment of an Emergency Manager.

She cited a recent report from the Michigan Municipal League which showed that the state has deliberately withheld $732 million in revenue-sharing to Detroit over the last 10 years. She also said the state reneged on an agreement between former Governor John Engler and former Mayor Dennis Archer to increase revenue-sharing in exchange for decreasing taxes on non-residents. As a result, she said, the city lost an additional $224 million in revenue sharing and $600 million in non-resident income taxes.

“The City of Detroit’s executive and legislative branches never saw the bankruptcy filing, the most historic in the U.S.,” Watson continued. “Over 2.3 million citizens repealed the Emergency Manager law in 2012, but the state re-enacted basically the same law. If the executive and legislative branches had an opportunity to deliberate on the bankruptcy, there might have been a decision to litigate the swaps and recoup some of that money.”

Watson referred to the interest-rate swaps associated with the $1.5 billion Pension Obligation Certificates loan of 2005-06, but Judge Rhodes responded that Orr filed litigation which is before him now. He referred to the entire loan, which Orr filed suit against on Jan. 17, calling it “void ab initio, illegal, and unenforceable.”

Orr/Jones Day have reportedly offered to withdraw that lawsuit in exchange for a settlement with FGIC.

Jan. 31, 2005: Fitch Ratings Joe O’Keefe (at mike) with Stephen Murphy of Standard & Poor’s press City Council to approve disastrous $1.5 Billion POC loan. They are assisted by then Detroit CFO Sean Werdlow, who shortly afterwards took a high level job with one of the lenders, and (r) Deputy Mayor Anthony Adams.

Many object to non-disclosure of 6.75% interest rate on annuity clawbacks; Orr: “I don’t know”

Much of the testimony centered on a 6.75 percent interest rate attached to the so-called “claw-backs” from retirees’ annuity savings funds (ASF), large cuts which would last the lifetime of retirees and beyond, affecting their beneficiaries. While retirees themselves contributed the money, Orr/Jones Day contended the payments they received included interest rates that surpassed the going rates of return.

Retirees did not discover the facts about the rate until a July 17 and July 21 bankruptcy hearing after they had already voted on the plan. Retiree Stephen Wojtowicz brought it to light then. During the Oct. 15 hearing, many demanded that both the interest and the entire ASF clawbacks be eliminated from the plan.

Wanda Hill during earlier run for City Council.

City retiree and former City Council candidate Wanda Jan Hill calmly and professionally queried Orr himself as part of an apparently thoroughly researched presentation on that issue. She went back through the various Plans of Adjustments (there are now seven) as well as numerous other documents that failed to include any mention of the 6.75 percent interest rate.

“It was never presented or listed as part of the official record until April 10, when it was included under ‘other factors,’” she told Orr. “It was not mentioned when dealing with the ballots April 17, but you had already decided on the claw-backs. Did you know about the interest rate at that time?”

“I don’t know, I would have to look at my notes,” Orr replied. “It was not included in the disclosure statement. There was some information on the city website. I don’t know if the documents sent to the retirees were put on record with the court.”

Jones Day attorney Heather Lennox rushed to the witness stand to make up for Orr’s lack of expertise. Coughing nervously, she argued that ballots listed the actual amounts resulting from the additional interest, and that the actual percentage was in the disclosure statement, and was discussed at two informational meetings for retirees in metro Detroit.

She said she assumed pensioners understood the complicated ASF process at the time of their retirement.

“We have to stop dealing with assumptions,” Hill retorted. “For 30 years and more, people set aside spendable cash so they would be in a position to live in comfort during their retirement. It should have been plainly explained in the ‘plain language statement.’ We needed the calculation and the reason for it. The [lack of disclosure] was nothing but a ruse.”

Retirees would likely have voted against plan if ASF interest rate disclosed

Walter Knall is earlier protest against EM takeover, bankruptcy.

She argued that if retirees had known about the interest rate, they may have voted against the plan.

Elaine Thayer, representing her city retiree mother as well as her “significant other,” called the lack of disclosure of the interest rate “fraud” under the legal definition of the term.

Retiree Walter Knall blasted the ASF cuts and the undisclosed interest rate.

“I have engaged in no fraud or deceit with regards to my own annuity, which I subscribed to according to pension fund standards, and therefore I am not liable [for repayment],” he testified. “The idea that me and my fellow retirees should be asked to pay back tens of thousands of dollars from our savings funds is outrageous and illegal.”

He concurred with objections including citations of state and federal laws violated, wich were filed by Law Department retirees James Karwoski and John P. Quinn. Karwoski is himself an attorney who did not testify, but said he has participated in the bankruptcy hearings by cross-examining witnesses and plans to participate in closing arguments as well. He said he felt the retirees who did testify did very well in presenting their cases.

Cecily McClellan

Retirees McClellan and Yvonne Williams-Jones called David Kausch, chief actuary for the global firm Gabriel, Roeder and Smith (GRS) to the stand. GRS has done actuarial reports for Detroit’s retirement systems for 75 years. Earlier, it contested the Orr/Jones Day estimate that the systems are underfunded by up to $3.5 billion, based on a report by Milliman, Inc. that was never completed. They issued a statement in June criticizing the Milliman estimate, available at link below story.

Kausch testified that the General Retirement System is 70 percent funded as of June 30, 2013. In 2012, it was 77 percent funded, and in 2011, 83 percent funded. Those percentages actually exceed those of the State of Michigan and other large cities in the U.S.

Kausch said long-term solvency is based on cash contributions to the system from both employees and employer over time. The City of Detroit stopped its federally-mandated contributions to the System when it declared bankruptcy, so they are not included in the 2013 report.

Yvonne Williams Jones

It does not intend to reinstitute them until 2023 under the proposed Plan of Adjustment. It wants to replace them with a one-time “Grand Bargain” payment of $816 million that is not yet fully in place and nowhere near commensurate with what payments would have been.

Kausch said the Great Recession of 2008, caused by Wall Street itself, was responsible for losses to pension systems across the U.S. He said the retirement system is gradually recovering along with the economy.

For solvency, he said, “the city must make contributions on a continued basis.” Under the Plan of Adjustment, he said, the city has proposed adjusting interest rates down to 6.75 percent.

“That means they are assuming the system’s assets are not going to grow as fast,” Kausch said. He explained that means the city’s required contributions will increase in order to maintain required payments to retirees.

Stephen Wojtowicz, who first exposed the 6.75 percent interest rate on the ASF recoupment, pointed out that while the system lost money during the Great Recession, in other years it earned rates as high as 22 percent while paying out only the standard 7.9 percent to retirees and returning the remainder to the system as a whole.

Michael Karwoski, retiree and attorney

Many local mainstream media reports mocked the retirees’ testimony and questioning of witnesses as unprofessional, although Attorney Karwoski said it was handled very well. In a covertly racist and insensitive comment, Christine Ferretti of the Detroit Free Press, a young white reporter, said Ms. Butler “was allowed to wear a floppy hat,” and left out the essence of her testimony that the bankruptcy is a profound racist assault on the people of the nation’s largest Black-majority city.

In contrast, Reuters reported largely on Ms. Butler’s testimony (see link below) and a local TV anchor was seeking her out for an interview during the break. However, Ms. Butler had already left.

Related stories cited above:

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

http://www.reuters.com/article/2014/10/15/usa-detroit-bankruptcy-idUSL2N0SA23T20141015  

City retirees protest draconian cuts during Detroit bankruptcy hearing Aug. 19, 2013

DAREA says they have resources to appeal trial outcome if it benefits only banks, not retirees

FGIC, party to infamous $1.5 billion COPS loan, reported ready to settle in exchange for unknown amount, city real estate

Kevyn Orr on COPS loan: “Void ab initio, illegal and unenforceable”

By Diane Bukowski

October 14, 2014

DAREA meets July 17, 2014

DETROIT – The Detroit Active and Retired Employees Association (DAREA) say they and others will appeal U.S. Bankruptcy Judge Steven W. Rhodes’ final ruling on the Plan of Adjustment if it continues to devastate retirees. As the case stands now, it appears likely only global banks will profit from the POA.

Major creditor and final hold-out Financial Guarantee Insurance Corporation (FGIC), which along with Syncora, Inc. insured the notorious $1.5 billion “Certificates of Participation” loan to Detroit in 2005-06, is reported to be ready to settle by Oct. 16. In exchange, they will get cash from bond issues and large chunks of revenue-producing downtown city real estate.

DAREA leader and city retiree Cecily McClellan

“We have the resources for an appeal now,” retiree Cecily McClellan told VOD.

“The Objectors to the bankruptcy are being called today to appear in court tomorrow at 8:30 a.m. The lack of notification is to prevent participation, preparation and public awareness. These are citizens without attorneys. We need your support and presence in court Wednesday at 8:30 a.m. in Room 242 of the Federal Building, 321 W. Lafayette.”

Individual objectors, including former Detroit City Councilwoman JoAnn Watson, along with many DAREA members, prepared motions with witnesses and briefs at Rhodes’ command weeks ago, but were not informed exactly when the hearing would be. Rhodes said at the time that he planned to schedule it on the last day of the POA trial.

Jones Day, on behalf of the city, has already filed an omnibus response to the objectors, likely to speed Rhodes’ final decision along.

McClellan noted that drastic cuts to retirees’ pensions and annuities proposed in Detroit’s bankruptcy are now being considered in the California bankruptcy proceedings of Stockton and San Bernadino. Previously, those cities had refused to touch pensions themselves, while at the same time enacting cuts in retiree health care. CalPERS (California Public Employee Retirement System), the largest in the U.S., wielded its clout in hearings to protect pensions.

Bay Area Rapid Transit (BART) public workers on strike in California last year.

CalPERS also came to the aid of Detroit, filing an amicus brief with the Sixth Circuit Court of Appeals to support appeals of Judge Rhodes’ bankruptcy eligibility decision by seven Detroit retiree and union entities. All seven have now indicated they will withdraw their appeals if the so-called “Grand Bargain,” $816 million to the retirement systems while the city withdraws its legally obligated payments for at least the next 10 years. Detroit’s retirement systems are worth about $6 billion.

 But Stockton bankruptcy judge Christopher Klein, taking a page from Rhodes’ eligibility decision last December, ruled Oct. 1 that California’s public employee retirement law “is simply invalid in face of the U.S. Constitution.” Terming state public pension protections nothing but contracts, as did Rhodes, he said they can be cancelled or modified under the U.S. Bankruptcy Code in order to pay off bankers.

Oakland CA public workers demand “Make the banks pay”

Klein has not actually sanctioned pension cuts yet, because the Stockton bankruptcy has not even reached the Plan of Adjustment stage, although it was filed a year before Detroit’s. Detroit is the only city that filed Chapter 9 bankruptcy under at the command of an unelected Emergency Manager, Kevyn Orr.

Bloomberg News reported that Californians for Retirement Security, a coalition of school teachers, police officers and other public employees, blasted Klein’s ruling. .

“We are disappointed that the judge has sided with Wall Street in a decision that has the potential of devastating citizens, employees, and making bad situations worse,” said Dave Low, the group’s chairman.

The Detroit Free Press reported today that FGIC, after months of closed-door mediation supervised by U.S. District Court of Eastern Michigan Chief Judge Gerald Rosen, is ready to reach a deal by Oct. 16, 2014.

Joe O’Keefe of Fitch Ratings smirks as Stephen Murphy of Standard & Poor’s presses disastrous $1.5 BILLION COPS loan on Detroit City Council Jan. 31, 2005. Rhodes has not yet ruled on Kevyn Orr’s lawsuit challenging this loan as “void ab initio, illegal and unenforceable.” Photo by Diane Bukowski

“City lawyer Tom Cullen told U.S. Bankruptcy Judge Steven Rhodes that the sides are close to a deal and hope to announce it in court Thursday morning,” reported Matt Helms. “Cullen said only that the deal would involve a share of bonds the city will issue to pay off creditors and ‘development aspects’ he didn’t detail.

 “People familiar with the negotiations have told the Free Press that the deal with Financial Guaranty Insurance Co. would involve cash from bonds and access to downtown real estate, including possible long-term leases of city parking garages. FGIC has a $1.1 billion claim against the city.”

Syncora, the other POC insurer, reached a similar deal with the City (i.e. Kevyn Orr-Jones day) Sept. 15. Syncora was a minor insurer compared to FGIC. Their deal involves a $44.8 million pay-out from new debt, plus control of the Detroit-Windsor Tunnel, and the Grand Circus Park Garage, including all their revenues.

FGIC CEO Timothy Travers. FGIC itself has just emerged from a financial crisis.

FGIC’s deal can be expected to be much larger.

 In January, EM Orr filed a lawsuit against the POC holders, stating the entire debt, which has skyrocketed to $2.8 billion with interest and default fees, is “void ab initio, illegal and unenforceable.” But instead of canceling the debt in toto, Orr and Jones Day have played footsie with the creditors under the table during Rosen’s secret mediation sessions. Rhodes has never heard the lawsuit.

Related stories:

http://voiceofdetroit.net/2014/09/15/syncora-gets-13-7-percent-44-8-m-in-detroit-bankruptcy-deal-fgic-fights/

http://voiceofdetroit.net/2014/02/11/em-lawsuit-v-cops-loan-demands-1-45-billion-back-to-city-make-the-banks-pay-no-detroit-pension-or-health-care-cuts/