The Retiree Association Parties objects to the City’s motion to establish procedures for the solicitation and tabulation of votes from pension and OPEB claims. Specifically, we object to the Balloting Documents. First, the Ballots request the claimant’s social security number and this is unnecessary and runs the risk of identity theft, so it should be removed. Second, the Balloting Documents are misleading regarding the proposed releases to be provided by pension and OPEB claimants. The documents indicate that if the claimant accepts the Plan, the claimant releases claims against the Debtor. But it is unclear whether this release is regardless of whether the Plan is confirmed, whether the claimant’s class accepts the Plan, and whether the parties to be released provide funding or consideration in exchange for the release. Lastly, the Debtor is asking these retirees to release valid claims against the state and other entities with no assurance that the consideration will even be paid, which is impermissible.
DETROIT, April 15, 2014 /PRNewswire/ -- The City of Detroit, working through federal bankruptcy mediators, has reached an agreement on pension and healthcare benefits with an association representing retired Detroit police and fire fighters – the first agreement with a major group of city retirees.
The Retired Detroit Police and Fire Fighters Association (RDPFFA), one of Detroit's oldest and largest employee associations, reached an agreement with the city regarding the Bankruptcy Plan of Adjustment earlier today. The association has about 6,500 members or more than 80 percent of Detroit's retired police officers and fire fighters. The association intends to recommend that its members approve the plan with the agreed upon provisions which preserve pensions and some cost-of-living allowances for retirees.
"This agreement comes after some very long, difficult but collaborative negotiating sessions with all parties involved," saidBrian O'Keefe, managing partner for Lippitt O'Keefe Gornbein PLLC, counsel for the RDPFFA. "This settlement is fair and equitable for both the city and the proud members of RDPFFA."
Lippitt O'Keefe Gornbein PLLC also represents the Detroit Retired City Employees Association (DRCEA). There are approximately 12,100 City of Detroit non-uniform retirees -- 65 percent of whom are dues-paying members of the DRCEA.
O'Keefe said that discussions between bankruptcy mediators, the City of Detroit and the DRCEA will continue to take place.
"We are continuing to work on behalf of the DRCEA's membership to preserve their pension and health care benefits," continued O'Keefe. "We are optimistic that it will be possible to achieve an equitable outcome."
Retired police and fire fighters are expected to vote on the plan starting in early May.
"There is no doubt some will criticize this agreement," said Don Taylor, president of the RDPFFA. "We believe this provides the best protection of our benefits that we could obtain under the circumstances."
Additional information about Lippitt O'Keefe Gornbein PLLC is available on the Internet at www.lippittokeefe.com.
The requests for production focus on the following items:
We filed this objection to the Amended Disclosure Statement to preserve retirees' rights and point out problems that could be fixed with the City's most recently proffered Disclosure Statement. Our major objection to the Amended Disclosure Statement is that there is not adequate information for retirees to make informed decisions on whether to vote for or against the City’s Amended Plan of Adjustment. Disclosure statements must contain simple and clear language describing the consequences of the plan on creditors’ claims and the possible alternatives. Furthermore, all information in a disclosure statement must be factually accurate and not misleading, and it must be understandable to the average unsecured creditor.
The Disclosure Statement provides inadequate information because it is impossible to determine individual retirees’ pension treatment. Such treatment is unknown until all the votes are processed, so retirees are unaware of the treatment of their claims when they actually vote. Also, Plan Supplemental Documents will not be provided until five days prior to the Voting Deadline. Some retirees may have to mail in their ballot before receiving these documents. The Disclosure Statement is also misleading regarding whether retirees were represented in pre-petition negotiations. These are just a few of the areas in which the Disclosure Statement is lacking information, but these arguments apply to all retirees holding PFRS, GRS, or OPEB claims.
The Retiree Associations concurred in the this objection filed by the Official Committee of Retirees. The Committee objected to a motion filed by the City seeking approval of a settlement with the “Swap Counterparties.” These parties include UBS AG, SBS Financial Products Company LLC, and Merrill Lynch Capital Services. The Committee objects to the settlement for the following reasons:
The Committee further argues that Swap Counterparties should not be granted an allowed secured claim against the city because the obligations to the Swap Counterparties may be void as a matter of law and the pledge of casino revenue to secure the swap counterparties may be void as a violation of the MI Gaming Act or by operation of the Bankruptcy Code. The Swap Counterparties would not have a direct lien on the casino revenues under the Collateral Agreement. Thus, the Settlement Agreement elevates the Swap Counterparties’ claim to secured creditor status without a legal justification.
The Court concluded that the challenges to the pledge under the Michigan Gaming Act and the Bankruptcy Code would likely be successful. The Settlement Agreement proposes to secure the City’s obligation with the same collateral, but the Settlement Agreement cannot be approved because the Court would be granting a security interest violating Michigan law.
The Settlement creates a new claim and simply labels it “unimpaired” to create a right to vote. This is artificial impairment. Most circuits hold that an artificially impaired class cannot meet the requirements of § 1129 of the bankruptcy code. The Eighth Circuit opposes confirmation of a plan secured by artificial impairment because it would encourage “side dealing” between some creditors to the detriment of others. The Committee argues the City is engaging in “side dealing.”
Lastly, the Plan Support Agreement allows the Swap Counterparties to vote in favor of the Plan of Adjustment so the City can cram down its other creditors. There is no authority under the Bankruptcy Code for these agreements. Such agreements that attempt to confer an advantage or are used to gain leverage over other creditors have not been approved by other courts.
The Retiree Association Parties filed a concurrence with several parties’ comment to the Court’s initial scheduling order regarding the process of approval for the Plan of Adjustment. The Comment, available here, expressed concern that the scheduling order, as filed, was “unrealistically compressed and contains some structural and sequencing issues that should be reconsidered.” Attached was a proposed scheduling order including suggested changes. On March 6, 2014, the Court issued an order incorporating many of the proposed changes, which can be accessed here.
Last Friday, the City of Detroit filed its Plan of Adjustment (POA). This document is the City’s plan for the adjustment of its debt according to Chapter 9 of the Bankruptcy Code.
The Plan classifies all of the creditors’ claims against the City and designates what classes of creditors are impaired or unimpaired by the Plan. The Police and Fire Retirement System (PFRS) and the General Retirement System (GRS) are considered “Impaired” under the POA and will have the opportunity to vote on confirmation of the Plan.
Class 10 is the PFRS Claims. The PFRS Claims will be allowed a sum of $3,281,800,000. The Plan refers to Exhibit II.B.3.t.i and II.B.3.t.ii for the PFRS Claims, but according to the definitions section, the City has until five days before the Voting Deadline to file these exhibits. Annual contributions will be made to the PFRS from the DIA proceeds in the amount of $175,000,000. After June 30, 2023, the City will contribute funds. The Plan proposes that the trustees of the PFRS adopt a 6.50% investment return assumption and discount rate. Active Employees who have a PFRS Pension Claim will receive additional pension benefits according to the PFRS Hybrid Pension Formula. The Confirmation Order of the Plan will order that no changes be made to the terms of the benefits for 10 years. If Class 10 and Class 11 (the GRS) accept the Plan, they can enter into a settlement with the City. The terms of the settlement are:
(1) the State will deposit the State PFRS Consideration into the PFRS in equal annual installments over a period of 20 years, (2) each Electing PFRS Holder shall be entitled to the PFRS Settlement Benefit Amount in addition to such Holder's PFRS Adjusted Pension Amount and (3) each Electing PFRS Holder will release the City and its Related Entities and the State and the State Related Entities from all PFRS Pension Claims, as more particularly described in the Plan PFRS Settlement Documents.
The Plan also calls for the Establishment of the Detroit “VEBA” – Voluntary Employees’ Beneficiary Association. It would provide life, sickness, accident, or other similar benefits to its beneficiaries, certain dependents, and future City retirees. Once it is established, the City will distribute the OPEB Claims note to the VEBA and direct the trustees of the Employee Death Benefit Plan to terminate the Plan and transfer the assets to the Detroit VEBA. Then the City will have no responsibility to provide life insurance or death benefits to the retirees.
Class 11 is the GRS Claims and is similar to the PFRS claims in most aspects. The GRS claims will be allowed a sum of $3,790,100,000. The contributions will be from pension-payments received by the City from the Detroit Sewer and Water Department (DWSD) and the DIA Funding Parties. After June 30, 2023, proceeds from the DIA Funding Parties in connection with the DIA Settlement will be contributed to the GRS and the City will cover what it lacks. The investment return assumption and discount rate for the GRS will be 6.25%. They are offered the same settlement deal as Class 10 and any GRS Claim Holder that also holds an OPEB claim will become a Detroit VEBA Beneficiary.
The Effective Date and consummation of the Plan cannot be achieved until various conditions are met. Some include: that the Bankruptcy Court enters a Confirmation Order, the Order authorizes the City to take all actions necessary to implement the Plan, the Order is not stayed, the settlement with Classes 10 and 11 is satisfied, sufficient value is realized from the DIA assets to fund the PFRS contributions, and the effective date is 180 days within the date of the Confirmation Order. These conditions may be waived by the City.
Upon confirmation, all official committees will be dissolved or disbanded. Provisions of the Plan will constitute a good faith compromise and settlement of all claims or controversies. The Confirmation Order will also be a discharge of all claims and other debts and liabilities against the City. On the Effective Date, all holders of claims are enjoined from filing any claims, recovering against the City, or taking any action interfering with the Plan. After the Effective Date, the City and its entities (including the EM) are no longer liable for their actions related to restructuring. The Plan becomes binding on the Effective Date whether or not claims are impaired and whether or not the claim holder accepts the plan.
On the Effective Date, the City will consummate both settlement plans with the PFRS and the GRS. The terms and treatment of the settlements are in the exhibits mentioned above that have not yet been filed by the City. The City may act as the Disbursing Agent or appoint other entities to make the distributions to the claim holders. The Disbursing Agent also selects the Distribution Dates to pay the holders as soon as it is reasonably practicable. At the City’s option, disputed claims can be submitted to ADR. The City’s rights to object to, oppose, and defend claims against it are reserved. The City can motion to the Bankruptcy Court that the Claims Objection Bar Date be extended. Finally, the City can amend the List of Creditors with the Court’s permission.
We filed this document with the Official Committee of Retirees and AFSCME in opposition to the City’s motion to dismiss our complaint (AdvDoc1, filed on January 9, 2014). Our three main arguments are (1) Plaintiffs’ action does not implicate § 904 of the Bankruptcy Code because we are just seeking to prohibit the City from taking unconstitutional action; (2) the City’s unilateral action constitutes an improper attempt to implement a sub rosa plan of adjustment; and (3) Plaintiffs have properly pleaded a claim for relief under the Contracts Clause of the U.S. Constitution.
We argue that § 904 is not implicated because the City cannot violate Retirees’ constitutional rights under the guise of “governmental power.” Plaintiffs’ claims do not interfere with the “governmental powers” of the City because such powers do not include the Constitutional violation of infringing upon Plaintiffs’ rights to their benefits. Furthermore, the Plaintiffs are not asking the Court to interfere with Detroit’s day-to-day operations or its property or revenue because the Complaint does not affect the City’s ability to provide basic services such as police, fire, and sewer, to city residents.
A sub rosa plan is a transaction outside of the plan of reorganization that greatly affects the parties to the bankruptcy. Here we argue that the City’s extreme healthcare cuts are a de facto or “creeping” plan of adjustment. The City plans on implementing an 83% cut to Retiree health care benefits. Lastly, the Plaintiffs state a claim for which relief can be granted. We plead a contract claim under the federal and MI constitutions. We also stated a claim for violation of due process rights because the Retirees have a property interest in their OPEB benefits and the City has not provided a meaningful process prior to deprivation of those rights.
In conclusion, the Plaintiffs request that the Court deny Defendants’ Motion to Dismiss and issue a preliminary injunction.
The RDPFFA filed this response on behalf of the Weiler class to argue that the Weiler judgment should be given greater consideration than an ordinary contract. The Weiler judgment guarantees a specified level of healthcare benefits for retirees, their spouses, and dependents. The benefits were earned under a Collective Bargaining Agreement (CBA), and courts have held that CBAs are more than an ordinary contract in a bankruptcy proceeding. The Weiler decision also protects Retirees’ spouses against the City’s arbitrary decision to pay each Retiree $125/month regardless of whether the individual is married.
This response also seeks relief from automatic stay. The Weiler judgment also provides that the City obtain a “stop loss” insurance policy. By unilaterally changing benefits, the City has triggered a loss that the stop loss insurance may insure against. Thus, the RDPFFA should be granted relief from automatic stay to enable it to pursue a claim against the policy. Relief from automatic stay should be considered for the benefit of the Weiler class, to the extent of the insurance, after affording Plaintiffs the opportunity for discovery.
We filed this motion seeking an expedited hearing on our petition for permission to appeal the Eligibility Order declaring that Detroit is eligible for Chapter 9 relief. The Official Committee of Retirees also filed a motion for an expedited hearing and a reply in support of that motion. We adopted this motion and reply and asked that the Court grant the relief that the Official Committee of Retirees seeks.
The main reason why we seek an expedited hearing is because the entire bankruptcy case for the City of Detroit requires speed and urgency in resolution of the issues. The Court may grant our motion to expedite if “good cause exists.” We argue that good cause does exist because the issues involved here are of critical importance to the City of Detroit, the issues include constitutional issues of first impression that will have a major impact on this case and across the nation, and because it will serve the public interest by avoiding any delay in the proceedings of this case.
Thus, we requested on behalf of the Retiree Association Parties that the Court expedite the hearing for their petition for permission to appeal.
This motion was granted by the court; a hearing on our temporary injunction motion is scheduled for Wednesday, January 22 at 10am.
This document is our appeal to the 6th Circuit Court of Appeals against the City of Detroit. It includes our five main issues on appeal, which are the same as those listed in Doc 2301, which was previously posted here.
In this complaint, we joined with the Official Committee of Retirees and AFSCME to bring an action for equitable and injunctive relief to prevent the City and EM Kevyn Orr from impairing its contractual obligation to provide health care benefits to the Retirees. Detroit had agreed by ordinance, by written contract, and through collective bargaining agreements to provide healthcare benefits to its employees and retirees. However, given Detroit’s recent economic crisis and bankruptcy filing, it has decided to impair these contractual obligations by paying only $125 per month to Retirees not eligible for Medicare.
Thus, we filed this complaint with the following counts alleged against the City and EM:
1) Unconstitutional Impairment of Contract Rights,
2) Violation of the MI Constitution,
3) Unconstitutional Deprivation of Property Interest without Due Process, and
4) Full Faith and Credit.
The Contract Clause of the US Constitution prohibits states from passing laws that impair contract obligations. Defendants will deprive Retirees of rights, privileges, and immunities protected by the Contracts Clause if they impair their healthcare obligations promised to Retirees. The MI Constitution has its own Contracts Clause, which will also be violated by Defendants’ proposed actions. The City’s failure to comply with the healthcare contracts will also deprive Retirees of their vested property rights to these benefits without due process. The contracts between the City and Retirees established property rights to healthcare benefits for the Retirees. They were deprived of due process because they have not been given an opportunity to be heard regarding the impact on their property rights. Lastly, we argue that the Weiler v. City of Detroit opinion, which guarantees healthcare benefits for Retirees, their spouses, and surviving spouses, should be given Full Faith and Credit under the US Constitution. The Court should enforce this judgment protecting healthcare benefits.
Based on these complaints, this group of Retirees seeks an order prohibiting Defendants from impairing contract rights to healthcare benefits and from implementing the proposed changes to retiree healthcare insurance.
We filed this concurrence to note that we concur in the objection filed by Ambac to the City’s Motion to Assume the Forbearance and Termination Agreement. We had previously filed an objection to this motion. The City filed a supplement to the motion and then Ambac filed a supplemental objection to the City’s supplemental motion, to which we now concur.
Ambac argues that the supplemental motion filed by the City should be denied for many reasons. There is not enough information for the Court or other creditors to determine whether the settlement is fair. Also, the settlement amount is not reasonable and is too costly for the City. The Swap obligations are void ab initio, and the pledge of casino revenue to secure the Swap obligations was unauthorized.
Here we are a part of a group of Objectors that object to the Mediator’s Recommendation for Approval of Settlement Between the Debtor and Swap Counterparties. The list of Objectors includes: Financial Guaranty, Syncora, the Retirement Systems, the Retiree Association Parties, EEPK, and FMS Wertmanagement. A major reason for the objection is that Kenneth Buckfire, the City’s investment banker, did not seem to fully understand the negotiation process, even though he was in charge of it. The Objectors also argue that the Recommendation impinges on the confidentiality of the mediation process. Thus, the Objectors disagree with the Recommendation and believe that the court should review the deal based solely on the evidence presented at the hearings that began on January 3, 2014.
This is our list of issues in regard to our Appeal from the Eligibility Order and Order for Relief. The main issues included in our appeal are:
1.) Whether the Bankruptcy Court erred in finding Detroit eligible for Chapter 9.
2.) Whether the Bankruptcy Court erred in finding Detroit authorizing to be a debtor under PA 436, in that it may permit the City to impair accrued financial benefits in violation of the Pensions Clause of the Michigan Constitution.
3.) Whether the Bankruptcy Court failed to apply the correct legal standards to determine that negotiations between the City and its creditors were “impracticable.”
4.) Whether the Bankruptcy Court erroneously determined that negotiations were “impracticable.”
5.) Whether the Bankruptcy Court erred in determining that the City’s Chapter 9 petition was filed in good faith.
This is our list of items to be included in the record on appeal regarding our Notice of Appeal from the Eligibility Order and Order for Relief that we filed on December 12, 2013. The list includes important documents, memorandums, and transcripts that we deem essential to be in the record on appeal.
Doc2268 and Doc2269
On December 5, 2013, the Court declared that the City of Detroit was eligible to be a Chapter 9 debtor. Several of the City’s creditors, including our clients the Retiree Association Parties, filed notices of appeal to the Eligibility Ruling and motions to Certify their appeals directly to the Court of Appeals.
On December 16, the Court held a hearing and concluded that it would grant certification of the appeals. Today, December 20, the Court issued an Order granting Certification accompanied by a Memorandum explaining its decision.
The Memorandum discusses three major issues:
1.) The Court certifies that appeals involve a “matter of public importance.”
2.) The Court recommends that authorization of direct appeals be denied.
3.) The Court denies many objecting parties’ requests that the Court expedite consideration of their appeals.
The Court granted certification because it determined that the Eligibility Ruling and the Order for Relief are “matters of public importance” pursuant to federal bankruptcy law. This is a requirement for certification. This is of great public importance because of the high number of retirees awaiting the results of their unfunded pensions, and whatever result occurs will have great impacts on future municipal bankruptcies.
Despite granting certification, the Court still recommended that direct appeals to the 6th Circuit be denied. The Court states that the Order for Relief is not a final order, which is a requirement for direct appeals, but rather the eligibility determination merely allows the City to proceed in its bankruptcy case. It is also not a final order because no creditors’ rights have been determined and will only be determined once the City files a Plan of Adjustment.
Lastly, the Court recommended that there is no expedited consideration of these appeals. Instead, it recommends that the Court of Appeals consults with Judge Gerald R. Rosen, the judge appointed to the mediation proceedings taking place between the City and its creditors, to determine whether expedited appeals will help or harm mediation.
Doc2068 and Doc2070
On behalf of the Retiree Association Parties, the RDPFFA and the DRCEA, Lippitt O'Keefe has filed a Motion for Certification of direct appeal of the Eligibility Order and Order for Relief issued by the Court on December 5th. If the Court certifies these two orders, this means that we can directly appeal certain parts or questions at issue at the court of appeals. The need for expediency is clear in this case, and a direct appeal would removal a layer of the appeal process. Particularly important for the Retiree Association Parties are the Court’s holdings that (1) Detroit is eligible to be a Chapter 9 debtor, and (2) that vested accrued pension benefits are contract rights.
In our Motion, we argue that certification is appropriate because (1) it is of public importance, (2) there is no controlling precedent, and (3) the Eligibility Order is contrary to the Michigan Circuit Court opinion on the Michigan constitutional protection of pensions – Gracie Webster et al. v. State of Michigan et al., Case No. 13-734-CZ (Ingham Cty. Mich. Cir. Ct., filed July 3, 2013)). We focused on the first issue, public importance, because other parties, such as the Retirement Systems, have filed other motions for certification explaining the other reasons in which we are able to rely on and file concurrences with.
The Court’s rulings that Detroit is eligible for Chapter 9 bankruptcy and that vested accrued pension benefits are contract rights are of great public importance at the local, state, and national level. This is the biggest municipal bankruptcy in the nation’s history and over 20,000 retirees are anxiously awaiting a decision on their benefits. Also, a final decision will provide guidance to any American city with an underfunded pension system.
We simultaneously filed a Notice of Appeal of the Eligibility Order and the Order for Relief for the Retiree Association Parties pursuant to federal bankruptcy law.
Doc1945 and Doc1946
This opinion was issued by the Bankruptcy Court on December 5, 2013 in response to 110 objections to Detroit’s eligibility to be a Chapter 9 debtor. The City had the burden of proving that it was in fact eligible to file. The ultimate ruling is that the City of Detroit is eligible to be a debtor under Chapter 9 of the bankruptcy code. The Court’s findings that lead to this conclusion are as follows:
The Court focused first on many constitutional issues confronting the bankruptcy filing. It concluded, first of all, that a Chapter 9 bankruptcy in and of itself is constitutional. Particularly important to pensioners is the Court’s conclusion that under the Michigan constitution, pension rights are contract rights. They are not given extraordinary protection and the only remedy for impairment of a pension is a claim for a breach of contract. The Court also found that Public Act 436, the act that allows an appointment of an Emergency Manager for the EM to file a municipal bankruptcy, does not violate the Michigan constitution.
Particularly interesting in the Court’s ruling is that Detroit did not negotiate in good faith with its creditors. It did not provide creditors with enough time and the City’s presentations and reports were vague and summary-like in nature. However, Detroit did not have a duty to negotiate with creditors because it was impracticable. Impracticality depends on the facts and circumstances of the case. Here, Detroit’s list of creditors is over 100,000 and it is the largest municipality to ever file bankruptcy. Many of the retirees had no formal representations to bind them because unions like AFSCME did not represent their retirees and it would be impracticable for the City to negotiate with every individual.
Although Detroit did not negotiate in good faith, the Court determined that Detroit filed its bankruptcy petition in good faith. The Court acknowledges valid objections to Detroit’s good faith, such as the fact that the firm Jones Day was hired to represent the City and a Jones Day attorney, Kevyn Orr, was appointed Emergency Manager. Also, Detroit probably waited too long to file. However, Detroit’s unprecedented debt and huge number of creditors demonstrates that the City needs relief and bankruptcy is an appropriate choice. The City made efforts to improve its financial condition before filing, such as reducing the number of city employees, reducing lighting rates, and improving tax collection. But the fact remains that the City is still insolvent.
For these reasons, the Court ruled that Detroit is eligible for Chapter 9 bankruptcy. The Court then entered an Order for Relief on the same day granting the City relief under Chapter 9 of the bankruptcy code.
We filed this supplemental brief to expand on our arguments supporting our objection to Detroit’s eligibility for bankruptcy. Within this brief, we made the following arguments:
Early in October, the City filed a motion requesting that the Court set January 21, 2014 as the last date to file proofs of claims in certain categories. The City excluded proofs of claims associated with the City’s Health and Life Insurance Benefit Plan and proofs of claims of beneficiaries of the General Retirement System and Police and Fire Retirement System, but they proposed sending out the same notice to all employees and retirees. We argued that this would cause a large amount of confusion in light of the City’s statements regarding reduction of funding to healthcare benefits. In this Response, we requested that the Court order that the retirees’ rights be protected so that retirees need not take further action to protect their health or pension benefits. A bolded statement enclosed in any notice would make this clear to all who received it. We also requested that the Official Retiree Committee be allowed to file proofs of claim for retirement benefits on behalf of retirees, to simplify the process.
Adversary Proceeding Doc 4
This motion requests that the Court schedule a hearing on the injunction motion very soon in light of the City’s recent statements that Retirees must choose their reduced healthcare benefit options by December 7th or purchase replacement insurance from the healthcare exchanges by December 15th. We also requested permission to take depositions of certain retirees who will be unable to attend the hearing on the injunction motion due to their health conditions or the distance of travel required.
We did win this motion; the hearing on the injunction motion is set for Friday, November 8th.
Adversary Proceeding Doc 3
This is a motion filed in the adversary proceeding referenced previously, seeking for the Court to issue an order prohibiting the City and Mr. Orr from imposing limitations upon the City Retirees’ healthcare benefits.
This document is a complaint filed against the City of Detroit and Kevyn Orr on behalf of the Official Committee of Retirees, the RDPFFA, the DRCEA and AFSCME Sub-Chapter 98, City of Detroit Retirees. This complaint initiates an adversary proceeding against the City. It is related to but separate from the bankruptcy proceedings. The complaint contains several counts, including:
This brief lays out our arguments in preparation of this week’s trial. We focused on the City’s obligation, before filing for bankruptcy, to negotiate with retirees with respect to pensions and healthcare benefits. The City failed to conduct any such negotiations, even though there was ample opportunity and ability to do so. This failure prevents the City from being eligible to be a debtor under the bankruptcy code.
This is a short amendment to Doc 329, listed previously. We filed this amendment in order to concur with the objection of the Official Committee of Retirees to the City’s Motion to assume a certain forbearance agreement.
This is our concurrence the Official Retiree Committee’s Motion to Withdraw the Reference. The Official Retiree Committee filed a motion arguing that the Emergency Manager was not authorized, as a matter of Michigan law, to have filed a Chapter 9 petition on behalf of the City. The Committee sought to have the District Court decide the various constitutional, statutory and factual issues instead of the bankruptcy court. The attorneys for the Official Retiree Committee argued that the Bankruptcy Court, a non-Article III court, is without constitutional authority to hear and determine the issues raised in the Eligibility Objection and that the retirees are constitutionally entitled to have an Article III court determine basic redressable issues affecting their livelihood as current or past citizens of the State of Michigan.
The Official Retiree Committee filed a Motion to Stay the Bankruptcy Proceedings at the same time as this motion, hoping to pause the proceedings until the Motion to Withdraw the Reference could be decided, however, this motion was denied. Within the Court’s denial, the Court also ruled that the Motion to Withdraw the Reference was not likely to succeed. However, the matter has not been finally decided, nor has it been set for a hearing yet.
This is a supplementary response to the requests for production. In this response we produced more documents describing the nature of the Associations and their history representing retirees.
This is our response to the City’s request for certain documents regarding the Association Parties. We objected to several of the requests but did produce documents responsive to the request, including the bylaws and articles of incorporation of each association, certain letters from retirees and other information about the associations.
This is a comment we filed with the Court with respect to an Order entered relating to the scheduling and procedures for hearing legal and factual issues relating to the City’s eligibility to be in bankruptcy. The original order only provided objectors with 150 minutes collectively for arguments and 30 minutes collectively for rebuttal. We were concerned that this would not be enough time to organize and coordinate with the other objecting parties as to which issues needed to be addressed most strongly. After a hearing, the Court modified the Order to allow 210 minutes for the objectors to present their arguments and 60 minutes for rebuttal argument.
This is a concurrence we filed, agreeing to the City’s Motion for a Protective Order to allow redaction of personally identifiable information in documents produced in this matter. This Motion was granted with a modification that allowed unrestricted access to the Data Room.
This is the Retiree Association Parties’ objection to the City’s eligibility to become a bankruptcy debtor under Chapter 9. We have attended and participated in all hearings disputing eligibility in this case and will participate in the eligibility trial scheduled to start this week. Our primary role in the Trial is to present evidence that the City cannot meet its burden to show that it negotiated in good-faith with the retiree creditors or that it was impracticable to do so (when in fact negotiations were practicable and welcomed).
This is the Retiree Association Parties’ objection to the City’s Motion to assume a certain forbearance agreement. We cited several reasons for our objection, chief among them the City’s failure to provide sufficient information about the claims and rights that the City was proposing to compromise. We also pointed out that the Retiree Committee was still not yet formed and was entitled to the opportunity to review and comment on the Motion as well. The Court initially set a date for hearings on the Assumption Motion, but they have been postponed without a new date scheduled yet.
This is a response to the City’s Motion to create a committee of retirees. Within this response, the Retiree Association Parties stated that they supported the concept of a committee of retirees, but objected to the following: