Objections to the bankruptcy filing

[BankruptcyGuy]

I've reviewed a fair chunk of the objections to the bankruptcy filing. Most are not likely to be considered, poorly drafted, or in accurate. I can't help but that think that the same people that will complain about the city incurring high legal fees are the ones filing these briefs. But I digress.

The attorney general's position, however, [[http://www.mieb.uscourts.gov/sites/d.../docket481.pdf) is probably the best roadmap as to what the rules may be:

1. Health care contributions can be modified without violating Section 24 of the Michigan Constitution;

2. Accrued pension benefits cannot be diminished; and

3. [[most interestingly) unaccrued pension benefits can be diminished.

If the bankruptcy court concurs, or if the BK court seeks state supreme court review of the issue and the Michigan Supreme Court agrees, then the road map has been laid out for what the state thinks the city may do.

Now the open question is whether the City will seek to liquidate assets [[is the possible buyer the State?) to pay for some of the unfunded pension liability? My guess is that the State may provide some, through asset purchases, but that Detroit's control, and other local control, over their own pension assets and determination of pension benefits, will be a thing of the past.

[Locke09]

I agree with you BankruptcyGuy, and this is one of the reasons why I felt the City could have accomplished what they needed to accomplish without filing for bankruptcy and incurring the associated costs. They could have altered the healthcare, since they've been doing it all along anyway. They could have frozen the pensions to prevent future accruals. Those are the two biggest debts, other than the DWSD debt - which we know won't be touched. Everything else is small potatoes in comparison.