This example is merely the tip of the iceberg. The reporting is primarily accurate, except that:

1. The Carpenters actually had a loan behind the two pension funds. Buying the first mortgage was an attempt to save face.

2. Everyone involved knew exactly what the rules were about cash flow distribution. If the money wasn't there to pay for operating expenses and the lenders, those further down the capital stack were not going to get paid anything. The pension funds had a very low chance of ever being repaid, right from the beginning.

3. If they look, the Detroit pension funds had a long history of investing only in Detroit-based deals [[either Detroit property or Detroit operators). Some of this was crooked, some merely stupid.