Posted on 11/14/2014 1:43:53 PM PST by Mariner
Taking aim again at government pensions, an angry creditor in Stockton’s bankruptcy case is appealing a pivotal court ruling that preserved the city’s retirement plans.
Franklin Templeton Investments filed a notice of appeal this week, challenging the Oct. 30 decision that approved Stockton’s reorganization plan. The plan keeps the pensions fully funded but pays Franklin, which loaned the city $36 million during better economic times, just 12 cents on the dollar.
The case in U.S. Bankruptcy Court in Sacramento has been a major legal test of the sanctity of public pensions in California. City officials and CalPERS, which runs the Stockton retirement program, fought hard to keep their relationship intact in the face of the challenge from Franklin. Stockton pays CalPERS about $29 million a year, a figure that is growing.
On Oct. 1, U.S. Bankruptcy Judge Christopher Klein ruled that Stockton had the right to slash its payments to CalPERS, a decision that sent shock waves through the pension industry and had public employee unions scrambling. A month later, though, the judge approved the Stockton reorganization plan even if it leaves its pensions untouched.
(Excerpt) Read more at sacbee.com ...
I’m still wondering if there will be an appeal over the auto manufacturer’s “bankruptcy.” Labor, who should have no standing, was given stock and control when the creditors, who should have taken first, were given cents on the dollar. This was our communist president paying off the unions.
This reeks, just like the illegal Government Motors “reorganization.” My wife and I lost a lot of our kids’ college fund in that one.
That deal was presented to the bankruptcy Judge as fait accompli, with no dissenters.
The Bond creditors were coerced via other means.
The Judge has little choice but to approve.
Municipal lenders had better remember the old saying — “Fool me once, shame on you, fool me twice, shame on me.” If they ever lend to municipalities with a history of generous pension payments again, they deserve all the screwing they get.
Stockton officials predicted a mass exodus by police officers and other city workers.
with real 25% unemployment in California, they would 100 applicants for every opening on day one if they put up a HELP WANTED SIGN.
The Pension Benefit Guaranty Corporation (PBGC) is an independent agency of the United States government that was created by the Employee Retirement Income Security Act of 1974 (ERISA).
Pension Benefit Guaranty Corporation is the backstop for private sector pensions.
Why do the public sector pensions get preferred treatment?
1: Probably past the statute of limitations
2: Assumes a system of law exists [true] and can/will be enforced [false]
Franklin Templeton is reaping karma for tearing down Bay Meadows Racetrack.
but, but, but, Suze Orman says buy muni bonds.
How can this be legal?
“...Pension Benefit Guaranty Corporation is the backstop for private sector pensions.
Why do the public sector pensions get preferred treatment?”
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Because the public sector employees are now the OVERLORDS and should never be disadvantaged or share in any losses (which THEIR benefits and entitlements caused).
If she is, she is stupid or corrupt or both.
Government and all it’s unionized kings men have systematically gang raped the tax payers as tax payers wages, jobs, investments and incomes hit the wall years ago....
Eventually, the wheel come off this thing. Just a matter of when.
You are so correct.
Public sector employees are the biggest lobbyists in the USA at all levels of government and, unfortunately, far too many voters do not understand that their local police, teacher, dog catcher, etc are sticking it to them.
Heheh. There went the neighborhood. Deep feelings about that one abound around here.
In fact like Franklin Investments which handed over tens of millions to float this greedy government scam, was offered mear penny's back on the dollar while all the kings men pensions were protected.
Like the tax payers, they were flat out robbed by government unionized mobsters.
In all honesty, that was about a year ago, I haven’t watched her since. Even a year ago, that was bad advice.
Puerto Rico and several US cities are all but bankrupt. Why anyone would lend them a penny or buy their worthless bonds is beyond me. IF you buy bonds make sure what its investments are. Obviously some will leave you holding the bag.
I went to the racetrack when I was 15 (2006) and it was a really beautiful place. Lots of open space, the grass was all perfectly green, and the architecture of the building had all of these neat Art Deco features.
And Franklin Templeton replaced it with a bunch of crappy low-income condos and apartments. So sad.
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