Payne for Detroit Pensioners

United States Trustee Daniel McDermott named five creditors to a committee that is supposed to represent interests of the unsecured creditors: Detroit’s two pension funds, which are its largest unsecured creditors, bond insurer Financial Guaranty Insurance Company, contract administrator Wilmington Trust Company and an individual creditor, Jessie Payne.

The plan to slash pensions is supposed to be released in early January and according to today’s story:

The committee was created in order to ensure all unsecured creditors are ably represented.

“Its primary power… is to have a stronger voice than an individual creditor, while actively participating in the negotiation of a plan for the adjustment of the debtor’s financial obligations,” said a Dec. 6 letter sent to all prospective committee members by the U.S. Trustee.

Let’s take a look at how ably this committee will be able to represent Detroit pensioners.

There will be two votes for bondholders who will be indifferent to pension cuts and two votes for pensioners (though if it’s current trustees in those positions they have also shown a level of indifference to pensioners by accepting those silly funded ratios as fact) and Jessie Payne.  Who is Jessie Payne?

On the agenda of the April 30, 2013 Detroit council meeting:

Submitting reso. autho. Order of Dismissal and to Enter into an Agreement to Arbitrate in lawsuit of Jessie Payne v. City of Detroit and Derrick Averitt; Case No.: 12-126172-NI and 12-129554-NF; File No.: A20000.003390 and A20000.003505 (CB); in an amount of not more than $750,000.00 for any and all claims arising out of the incident which occurred on or about February 17, 2012 at or near Northland Mall Parking Lot.

Over 20,000 Detroit retirees will see their March, 2014 pension checks cut substantially and the deciding vote on a committee to represent their interests will be a slip-and-fall victim who those benefiting from the process hand-picked.

2 responses to this post.

  1. Posted by Tough Love on December 23, 2013 at 6:51 pm

    I wonder if/what deal the Bondholder-side is cutting with Payne for his support.


    • Posted by Anonymous on December 23, 2013 at 8:42 pm

      Doesn’t Judge Rhodes gave to approve the committee’s plan? Does anyone believe the the 2 pension committee members have the interests of the pensioners at heart? They’re screwed no matter how it spins out


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