Court Hit With Sad Stories From Detroit Retirees Objecting To Bankruptcy Cuts
DETROIT (WWJ/AP) — As courts, leaders in Lansing and Detroit struggle in the wake of the city's bankruptcy filing with decisions about pensions promised to Detroit retirees, the pensioners themselves are speaking.
Emergency Manager Kevyn Orr has made it clear pensions have to be cut for the city to survive bankruptcy, with a proposal of a 26 percent slash for everyone except police and fire retirees, who would lose 6 percent.
Those potentially affected by the bankruptcy filing -- about 34,000 pensioners -- are able to object to it by filing complaints with the U.S. Bankruptcy Court. There are about 90 objections in the file right now, according to court records.
Some are sending heartbreaking stories.
In one letter to Judge Steven Rhodes, a retiree wrote she's "heart broken" and says her husband is blind and on dialysis. She writes if any part of her money was cut she "might as well dig a hole in my back yard to lay us both to rest because I surely cannot or will not be able to pay for a funeral."
The letter ends with the woman asking the judge to "please help me to keep all my retirement benefits."
Another man explains that his two-income household is now a one-income household since his wife lost her job in 2012. "I am in the poor house, or you can say out in the streets," he wrote.
One man said he "drove garbage trucks, cut grass and did a lot of jobs that needed done," as a longtime city employee, and says "I'm not crying, but I will be if you let them take our money."
A 29-year bus mechanic says he has lingering neck and back problems from continual bending and stooping on the job, needs his health insurance, and says the cut "will make me eligible for state assistance for the first time in my life."
Gov. Rick Snyder pledged $350 million of state money in January to help fund pensioners and the Detroit Institute of Art; another $330 million is expected to come from private sources. It's unclear if or how much that would offset cuts.
The Detroit Free Press is reporting Detroit reached a new deal Thursday with Barclays to borrow at least $120 million to "speed the city's bankruptcy restructuring and invest in new services."
This comes after a federal bankruptcy judge who vetoed two previous deals between Detroit and lenders to settle hundreds of millions of dollars in pension debt had a hearing Wednesday on a third tentative agreement.
Detroit emergency manager Kevyn Orr announced Tuesday night the banks agreed to accept $85 million from the city to settle the debt.
Judge Steven Rhodes vetoed two earlier tentative deals for Detroit to pay $230 million and $165 million to UBS and Bank of America Merrill Lynch to settle the debt incurred in 2009 when the city pledged casino taxes as collateral to avoid defaulting on pension debt payments. The city ended up locking itself into high interest rates on bonds, and the deal became too costly when interest rates plunged.
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