- Snyder acknowledged that he deliberately allowed retiree pensions to be part of the filing, even though the EM statute gives him the power to take pensions off the table.
- Kevin Orr claims he knew nothing about Jones Day's discussions with the governor when they pitched bankruptcy as the top option in their 2012 presentation to obtain the lucrative restructuring & bankruptcy litigation contract.
- Orr admitted that prior to his filing for Chapter 9 bankruptcy on July18, 2013, he would not agree to any settlement that did not include cutting retirees' pensions.
- Orr said he "didn't recall" whether he ever discussed the possibility of State funds as a remedy for the estimated (but contested) $3.5 Billion in pension shortfall. Even Judge Rhodes expressed shock at his answer. But he did confirm that it was very clear that the state would not provide assistance in debt restructuring prior to the filing of Detroit's bankruptcy petition.
- According to an October 29th account of the court proceedings by Detroit News Columnist Daniel Howes: "In a July 9 e-mail, state Treasurer Andy Dillon signaled flexibility to manage the city’s unfunded pension liabilities, pegged by Orr at $3.5 billion: “Because pensions have such a long life,” Dillon wrote, “there are a lot of creative options we can explore to address how they will be treated in a restructuring.”
- Again from the same Detroit News article: "In a July 12 e-mail, the governor’s counsel, Mike Gadola, suggested to Snyder’s key advisers that he consider placing conditions on a Chapter 9 bankruptcy petition for anything that could impact pension benefits, general obligation debt and the sale of certain assets over a pre-determined value."
From The Detroit News: http://www.detroitnews.com/article/20131029/BIZ/310290031#ixzz2jFnbvQp7
- From a Detroit Free Press article on the same court proceedings, by Teresa Baldas & Alisa Priddle:
according to the testimony Friday of investment banker Kenneth Buckfire, ...who testified that he knew as early as March of 2012 that the state and Jones Day were contemplating filing bankruptcy that spring. But when Buckfire was hired in January to be the city’s investment banker to restructure debt, he did not disclose that information to city council or Mayor Dave Bing,..Those discussions on bankruptcy occurred before the city entered into a consent agreement with the state in April 2012."
This information is important because it goes to the heart of the "negotiate in good faith" requirement under Chapter 9, and offers further confirmation that slashing retirees' pensions was always on the table, and at the top of the list of options. The information gleaned from this testimony also raises questions: Did Orr make it a condition of his acceptance of the EM post, that the governor not restrain or limit him in any way, or did the governor, an attorney and former venture capitalist, determine that he, Orr, and Jones Day were all on the same page regarding cutting public employee pensions? I think the latter is the case. It's also clear that former State Treasurer Andy Dillon did not necessarily share this point of view.
My other question: Is Kevyn Orr getting played?
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| Photo by Andre J. Jackson, Detroit Free press |
Does something smell rotten here? Stay tuned for further developments.....
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