|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Judge Steven Rhodes during a historical ruling out of a U.S. Federal Bankruptcy Court in Detroit superseded the Michigan's Constitutional langauge in Article 9, section 24, by ruling for a reduction in City of Detroit retirees and workers pensions to satisfy the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.
"Michigan Constitution protects Pension Rights as a contractual right, and bankruptcy law allows debtor to impair Contracts," said Judge Rhodes.
"§ 24 Public pension plans and retirement systems, obligation.
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"
“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.”