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Tuesday, December 3, 2013

BREAKING: Michigan Attorney General Bill Scheutte Will Appeal To Uphold Pensions Guarantees Detroit Bankruptcy Case.

Photo Credit - Michigan Attorney General Bill Schuette
"Republican Attorney General Bill Schuette issued a statement December 3, affirming plans to uphold Michigan's Pension Guarantee in Article 9, section 24 of the State Constitution" 

Judge Steven Rhodes during a historical ruling out of a U.S. Federal Bankruptcy Court in Detroit superseded the Michigan's Constitutional langauge in Article 9, section 24, by ruling for a reduction in City of Detroit retirees and workers pensions to satisfy the municipality insolvency.

Schuette agreed with Judge Rhodes decision to allow Detroit to proceed, with oversight of a Federal Bankruptcy Court negotiations creditors but questioned the Judge ability to dismiss Michigan Constitutional law on pension guarantees.

“Everyone knows Detroit is bankrupt. I agree with Judge Rhodes’ decision that the City of Detroit is eligible for bankruptcy,” said Schuette. 
Rhodes decision affirms Detroit's Pensioners are at risk for steep reductions, as some retirees live on less than $1000 a month.
"Michigan Constitution protects Pension Rights as a contractual right, and bankruptcy law allows debtor to impair Contracts," said Judge Rhodes.
Michigan Constitution of 1963 states the following:
"§ 24 Public pension plans and retirement systems, obligation.
Sec. 24.
The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby.
Financial benefits arising on account of service rendered in each fiscal year shall be funded during that year and such funding shall not be used for financing unfunded accrued liabilities.
History: Const. 1963, Art. IX, § 24, Eff. Jan. 1, 1964"
Yet, A.G. Schuette dismissed Judge Rhodes decision and plans to file an amicus brief, upholding the State Constitutional provision to protect pensioners annuity payments from the City of Detroit.
“However, I am deeply disappointed by Judge Rhodes’ analysis that pensions may be impaired. I will continue to aggressively defend pensions and Article 9, Section 24 of the Michigan Constitution as this case proceeds to the confirmation stage of bankruptcy planning, at which time we can thoroughly review any plans for potential legal action involving pensions," said Michigan Attorney General Bill Schuette.

In the meantime, I plan to file amicus briefs in support of pension protections provided under  the Michigan Constitution.”
Independent Underground News and Talk will provide breaking updates on the Detroit Bankruptcy case via our Twitter, Facebook social media accounts and on this resource, throughout the evening as warranted.
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