Posted on 10/28/2013 8:47:05 AM PDT by Hojczyk
Another Democrat Success Story— The 23,500 pensioners in Detroit are going to have to adjust their budgets. The city plans on cutting pensions by 84 percent. Doug Ross and Reuters reported:
On Friday, city financial consultant Kenneth Buckfire said he did not have to recommend to Orr that pensions for the city’s retirees be cut as a way to help Detroit navigate through debts and liabilities that total $18.5 billion.
Buckfire said it was clear that the city did not have the funds to pay the unsecured pension payouts without cutting them.
“It was a function of the mathematics,” said Buckfire, who said he did not think it was necessary for him or anyone else to recommend pension cuts to Orr.
“Are you saying it was so self-evident that no one had to say it?” asked Claude Montgomery, attorney for a committee of retirees that was created by Rhodes.
“Yes,” Buckfire answered.
Buckfire, a Detroit native and investment banker with restructuring experience, later told the court the city plans to pay unsecured creditors, including the city’s pensioners, 16 cents on the dollar. There are about 23,500 city retirees.
“Because I’m wondering if all creditors are feeling the pain equally or if the city retirees are bearing the bulk of the costs.”
Bonds are sold with different risk levels. A secured creditor bond probably has to be paid in full. But Obama changed 200 years of law when he dictated that Chrysler’s secured bond holders would take only x% and he gave the rest to the unions, which had ZERO rights. Let’s say Chase Manhattan bought a secured bond for $100 million dollars plus 12% interest. I believe they are owed all of it so Detroit would have to sell assets to pay the amount. It has to be this way or the system of getting loans based on bonds collapses and the way cities are financed disappears.
The city workers are not secured creditors.
Was it them or the incompetents who ran the city? In any case you can say all the creditors aided and abetted. So all should pay the price. Even the secured creditors.
If you planned your entire life around this you are now SOOOOO SCROOOOOOD.
Don’t EVER believe a promise made to you for thirty years in the future. Nobody has a crystal ball that big.
I don’t think so; the vendors had nothing to do with the city’s decision to spend more than they had.....the employees though are directly responsible for electing gov. officials that willingly gamed the taxpayers to get sweetheart deals for their retirement. Pension funds are the main culprit. Sorry but the city leaders and city employees are the guilty ones here and it is poetic justice that they have to cough up their ill gotten pensions for it!!!Ponzi schemes only benefit the early culprits...sooner or later the bill comes due!!!
People can criticize the pensioners, but they had a good-faith agreement with the city that those pensions would be honored, and 16-cents-on-the-dollar will likely put them on welfare at best and on the streets at worst. The city had an obligation to manage its revenues to support its obligations. Now, IF the pensions had a medical insurance component, THAT is the part that should be cut or rolled-back.
The greedy unions and greedy politicians made deals promising each other Other Peoples Money. They failed in any fiduciary responsibility they had.
Let the public officials who made those promises pay up.
I wonder what the first year was when the tax revenues were lower than the previous year. 1992?
Unfortunately government exempted itself from having to fully fund their pensions. These workers should have been able to contribute more to their pensions too.
Sell their bodies for parts and fund the pensions. That might put a stop to this nonsense.
Pension funds are supposed to be managed with a keen eye on actuarial and financial components. Somebody wasn’t doing their job. And, of course, the policies that drove 2/3 of the population - representing a huge chunk of the tax base - out of the city, are also a huge part of the problem.
There are plenty of city-owned abandoned housing they can give these people to make up the difference.
Leftists also took that money and spent it on other feel-good lousy programs, probably with the support of those unions.
We are sorry we robbed your pension fund to fund our glorious socialist programs. In order to make it up to you we are giving you the deed, free and clear on this fabulous home. Technically the city was trying to collect $25,000 in taxes owed but we decided to forego that for you.
“Pray you get 16 cents on the dollar.”
Unlike the City of Detroit the Federal Reserve Board can inflate away whatever social security benefit we might have coming to us. So I wouldn’t be surprised if 16 cents on the dollar might be the magic number...
All in BK court the plaintiffs are screwed.
Most of them probably couldn't; at least not if they were required to do it in cursive writing.
“Are all the other creditors only getting one-sixth of what they were owed?”
From the posted article:
-the city plans to pay unsecured creditors, including the city’s pensioners, 16 cents on the dollar.-
No...and THAT is the PROBLEM!
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