Pensioners: TAKE THE DEAL

**corktownyuppie** · April-11-14, 09:58 AM

The Court approved the swaps settlement.

The earlier you get on board, the better the deal gets. The longer you take, the more likely other classes of creditors settle out and leave even less for you.

With today's ruling, there exist enough creditors in favor the bankruptcy plan that the Court can do a "cram down" and force everyone else to hold their nose and swallow.

I feel very bad for the pensioners. And their leadership is accustomed to two-party negotiations. This is a totally different ballpark, and you've got multiple creditors negotiating for the same pie.

Don't make it any worse than it has to get.

http://www.freep.com/article/2014041...ion-bankruptcy

**Detroitnerd** · April-11-14, 10:25 AM

What BS. Somebody FUCKS YOU OVER, you go to court through your imposed proxy, and he proposes a deal to PAY OFF THE PEOPLE WHO FUCKED YOU OVER. The judge says you should sue and the settlement is too generous, and your proxy says, no, he'd rather take a deal to pay the PEOPLE WHO FUCKED YOU OVER." The judge again says you should sue and the settlement is too generous and your proxy still wants to pay the PEOPLE WHO FUCKED YOU OVER. Finally, after much wrangling, the judge rules to pay these CRIMINALS and majority of people, led around by the nose by the media, cheer.

Disgusting.

**corktownyuppie** · April-11-14, 10:38 AM

Yeah, so says you. There are 7 other competing sides to this story, and it's not at all clear who would win. But hey, no one has to take any deal.

I'm just saying that the longer you wait, the worse the deal can get.

**Honky Tonk** · April-11-14, 10:53 AM

I think I read somewhere in the story, the deal was orchestrated by Mr. Kilpatrick, [[read COD) bad advice maybe?

**Detroitnerd** · April-11-14, 10:54 AM

Well, you'll never be MY lawyer CTY.

**corktownyuppie** · April-11-14, 10:56 AM

Originally Posted by Honky Tonk

I think I read somewhere in the story, the deal was orchestrated by Mr. Kilpatrick, [[read COD) bad advice maybe?

I am giving Kilpatrick the benefit of the doubt on this one. This was always a tricky deal to pull off, and it was certainly on the edge of plausibility...which is why litigating this is so tough. It really could go either way. And, at the time, no one really thought that it could get all the way to bankruptcy.

Rhodes put the hammer down and states that this isn't a popularity contest. It's a legal contest. So rather than argue whether or not the deal was legal, it's pretty much decided that we'll never know for sure, and that both parties agreed to satisfactory terms to put it aside.

Rhodes urged both sides to reconsider their strategies and resume negotiations.
“This bankruptcy case is not about who wins in the court of public opinion,” Rhodes said.

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz2yapONh23

**Wesley Mouch** · April-11-14, 11:05 AM

Originally Posted by Detroitnerd

What BS. Somebody FUCKS YOU OVER, you go to court through your imposed proxy, and he proposes a deal to PAY OFF THE PEOPLE WHO FUCKED YOU OVER. The judge says you should sue and the settlement is too generous, and your proxy says, no, he'd rather take a deal to pay the PEOPLE WHO FUCKED YOU OVER." The judge again says you should sue and the settlement is too generous and your proxy still wants to pay the PEOPLE WHO FUCKED YOU OVER. Finally, after much wrangling, the judge rules to pay these CRIMINALS and majority of people, led around by the nose by the media, cheer.

Disgusting.

Where do you factor in the self-'FUCKING OVER' by the pension trustees and their 'workers invest with us to screw current pensioners' plan?

**Detroitnerd** · April-11-14, 11:12 AM

Originally Posted by Wesley Mouch

Where do you factor in the self-'FUCKING OVER' by the pension trustees and their 'workers invest with us to screw current pensioners' plan?

Hey, not to soft-pedal that either. But they might have just been FUCKING MORONS, whereas we have evidence that the big banks were able to fix the very things they proposed the city bet upon. If your idiot cousin brings you to his idiot cousin's casino and you find out the house was rigged from the beginning, do you blame your cousin and focus on him? Or fight the house that fixed your bets against you?

This is the kind of stuff that should make all decent people puke with rage.

**corktownyuppie** · April-11-14, 11:16 AM

Originally Posted by Detroitnerd

If your idiot cousin brings you to his idiot cousin's casino and you find out the house was rigged from the beginning, do you blame your cousin and focus on him? Or fight the house that fixed your bets against you?

This is the kind of stuff that should make all decent people puke with rage.

Hey, I'm with you on the LIBOR nonsense. That is/was ridiculous. The question is could we prove it in court. That's a totally different standard to overcome, and as you mention, the idiot cousin[[s) we elected to run the ship don't make it any easier.

**313WX** · April-11-14, 11:27 AM

Originally Posted by Detroitnerd

What BS. Somebody FUCKS YOU OVER, you go to court through your imposed proxy, and he proposes a deal to PAY OFF THE PEOPLE WHO FUCKED YOU OVER. The judge says you should sue and the settlement is too generous, and your proxy says, no, he'd rather take a deal to pay the PEOPLE WHO FUCKED YOU OVER." The judge again says you should sue and the settlement is too generous and your proxy still wants to pay the PEOPLE WHO FUCKED YOU OVER. Finally, after much wrangling, the judge rules to pay these CRIMINALS and majority of people, led around by the nose by the media, cheer.

Disgusting.

The name of the game right now is to simply get Detroit out of bankruptcy court ASAP before Orr leaves, by any means necessary.

**Detroitnerd** · April-11-14, 11:29 AM

Again, the problem comes clearly into focus: The banks, the bond insurers and the ratings agencies all have too much power. If regulations hadn't been gutted and if the feds were serious about prosecuting white-collar crime instead of coddling these criminals, and if for-sale politicians weren't riding into office on a flood of corporate money NONE OF THIS WOULD HAVE HAPPENED. Grrrrr ...

**corktownyuppie** · April-11-14, 11:41 AM

Originally Posted by 313WX

The name of the game right now is to simply get Detroit out of bankruptcy court ASAP before Orr leaves, by any means necessary.

Orr was recently interviewed and said that after working on this bankruptcy case, any small possibility of him running for public office has been totally extinguished. The way I was interpreting his remarks, I bet this whole process was far more frustrating for him than he ever thought it would be.

Politics in his future? Detroit case has "done me in", Orr says

http://www.reuters.com/article/2014/...0N212220140410

Could you imagine if we need City Council and the Mayor to agree on any settlement? We'd be in court for a decade without anything getting done.

**Cliffy** · April-11-14, 11:58 AM

I'm sure Orr is upset that his law firm has a bunch of billable hours and his dreams of becoming the local dog catcher in Detroit are over.

**Detroitnerd** · April-11-14, 12:15 PM

Originally Posted by corktownyuppie

Orr was recently interviewed and said that after working on this bankruptcy case, any small possibility of him running for public office has been totally extinguished.

Save your crocodile tears, CTY. He was scheduled to return to his native Florida, head up a new office for his high-powered firm, and buy a Lamborghini convertible, not run for office. I seriously doubt somebody excited about the high life is much interested in a civil servant's salary ...

**corktownyuppie** · April-11-14, 12:37 PM

Originally Posted by Detroitnerd

Save your crocodile tears, CTY. He was scheduled to return to his native Florida, head up a new office for his high-powered firm, and buy a Lamborghini convertible, not run for office. I seriously doubt somebody excited about the high life is much interested in a civil servant's salary ...

The tears weren't for him. The tears are because there is no easy way out of this process to the point that the people who are highly trained to do it are expressing that the whole process is mind-numbingly frustrating because of the politics.

And I totally agree.

When this thing is over, everything will end up pretty much everyone thought this was going to go. But if people wanna spend 24 mos. trying to fight it the whole way, be my guest.

**Detroitnerd** · April-11-14, 01:28 PM

Originally Posted by corktownyuppie

The tears weren't for him. The tears are because there is no easy way out of this process to the point that the people who are highly trained to do it are expressing that the whole process is mind-numbingly frustrating because of the politics.

And I totally agree.

When this thing is over, everything will end up pretty much everyone thought this was going to go. But if people wanna spend 24 mos. trying to fight it the whole way, be my guest.

A: This didn't need to happen at all. This was orchestrated in advance by Snyder and several law firms.

B: The purpose of this is NOT to put the city on a firm financial footing. Look no further than DPS to see how Lansing "saves" units of government.

C: What you call "fighting it" was once called "democracy." Have it your way.

D: What politics are in the way? Here, talented and skilled lawyers have cut a path through the law to get the outcomes they want. All the major politicians seem to be on board with this anyway, with a few voices on council that seem eminently reasonable in their complaints about this whole fiasco. Again, what politics? Are you talking about attorneys like Jerome Goldberg trying to use the court system for what it was intended?

**Detroitnerd** · April-11-14, 01:30 PM

Jerome Goldberg: "If Detroit succeeded in invalidating the swaps, it could potentially claw back $300 million in payments that were already made to the banks. It's a question of the city giving up $300 million and instead paying $85 million."

Hmmmm, sounds like a pretty darn good point to me.

**313WX** · April-11-14, 01:33 PM

Originally Posted by Detroitnerd

B: The purpose of this is NOT to put the city on a firm financial footing. Look no further than DPS to see how Lansing "saves" units of government.

Apples and oranges really.

The city of Detroit running out of cash [[which would have happened had it not been for that controversial 5-4 vote on the Consent Agreement in April) would have had a far more disastrous impact than whatever happens with DPS.

The subsequent steps to get Detroit where it is now was simply to soften the blow that Detroit's problems would have on the state as a whole. Snyder is the Governor of everyone in Michigan, not just Detroiters.

**Detroitnerd** · April-11-14, 01:39 PM

Originally Posted by 313WX

Apples and oranges really.

The city of Detroit running out of cash [[which would have happened had it not been for that controversial 5-4 vote on the Consent Agreement in April) would have had a far more disastrous impact than whatever happens with DPS.

The subsequent steps to get Detroit where it is now was simply to soften the blow that Detroit's problems would have on the state as a whole. Snyder is the Governor of everyone in Michigan, not just Detroiters.

It was the banks that crashed the housing market and suckered Detroit into outrageous swaps scams. And it was the state that cut revenue-sharing agreements [[abrogated them, really) and drew a circle around Detroit much like a bank draws a circle around bad assets.

This must all be viewed against a backdrop of 30 years of corporations finding ways to drain their pension funds and leave workers flat. The only money left to raid was in public pensions, and if they can do it here, where we have some of the strongest protections of public pensions, they can start doing it in many other places.

This is a heist, plain and simple.

Having described the shark attacking our state's workers under the water's surface, I now leave you to discuss how encouraged you are by the ripples on the water, and all the wonderful work that must be getting done beneath the dancing waves.

**corktownyuppie** · April-11-14, 01:47 PM

Originally Posted by Detroitnerd

Jerome Goldberg: "If Detroit succeeded in invalidating the swaps, it could potentially claw back $300 million in payments that were already made to the banks. It's a question of the city giving up $300 million and instead paying $85 million."

Hmmmm, sounds like a pretty darn good point to me.

Yeah. IF.

That's the problem.

It could also go the other way. IF Detroit fails at invalidating the swaps, instead of paying $85MM, we pay $300MM.

Are you really willing to risk that? How much money would you spend litigating it? How many years?

Rhodes says there's a "very real risk of a court finding" that swaps are protected under safe harbor laws.

http://live.freep.com/Event/Live_blo...tlement_ruling

=====

Even though Rhodes says that the swaps were probably illegal, he basically comes out and says that Detroit could sue and still lose.

I wish the world was simple, and that there were clear, easy answers. And that Jerome Goldberg was omniscient, and that we could predict the future.

But we can't. So, $85MM is better than $300MM in my book.

**EastsideAl** · April-11-14, 02:27 PM

Originally Posted by 313WX

Snyder is the Governor of everyone else in Michigan, not Detroiters [[and other residents of majority black municipalities).

Fixed to reflect reality.

**Honky Tonk** · April-11-14, 02:38 PM

Rhodes says there's a "very real risk of a court finding" that swaps are protected under safe harbor laws.

It would seem to uneducated me, that if you made a binding contract to get into this, win or lose, then yes, your libel for the consequences.

**corktownyuppie** · April-11-14, 02:45 PM

Originally Posted by Honky Tonk

Rhodes says there's a "very real risk of a court finding" that swaps are protected under safe harbor laws.

It would seem to uneducated me, that if you made a binding contract to get into this, win or lose, then yes, your libel for the consequences.

Exactly. Rhodes says that they were probably illegal. But he also says that if you fight it in court, the court may find that the swaps are protected and we could lose.

I think we've been rolling enough dice for the last 30 years.

**Hermod** · April-11-14, 03:12 PM

Originally Posted by Detroitnerd

Again, the problem comes clearly into focus: The banks, the bond insurers and the ratings agencies all have too much power. If regulations hadn't been gutted and if the feds were serious about prosecuting white-collar crime instead of coddling these criminals, and if for-sale politicians weren't riding into office on a flood of corporate money NONE OF THIS WOULD HAVE HAPPENED. Grrrrr ...

Wow, I didn't know that having a DWSD bond in my retirement portfolio was a criminal act.

**mwilbert** · April-11-14, 03:31 PM

Originally Posted by Detroitnerd

A: This didn't need to happen at all. This was orchestrated in advance by Snyder and several law firms.

Whether or not it was orchestrated in advance doesn't mean it didn't need to happen. Everything I have seen so far indicates that it did need to happen. Without a filing I think the city would have run out of cash last year and creditors would have started trying to attach assets.

No doubt there are lots of specific things that could have turned out differently than they are going to, but the underlying fiscal problem wasn't created by Snyder and wasn't being dealt with effectively by Bing.