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Detroiters argue against bankruptcy for troubled city

Sept. 19, 2013 at 4:56 PM   |   Comments

DETROIT, Sept. 19 (UPI) -- A bankruptcy judge in Detroit heard Thursday from about two dozen people arguing against allowing the troubled city to go through Chapter 9 bankruptcy.

Those who spoke at a public hearing -- including several retirees and survivors of retirees -- urged U.S. Bankruptcy Judge Steven Rhodes not to allow the city's financial difficulties to disrupt their pensions. Some argued the city -- which is trying to restructure $18 billion in debt -- is not insolvent and is not eligible for protection under Chapter 9, The Detroit News reported.

Sheilah Johnson -- who retired after working for the city for 28 years -- said she is "too old to start over and try to find another job" if her $3,000-per-month pension is cut.

She argued the city would be on a better financial footing if businesses paid all their taxes and the city collected other debts.

Cynthia Blair, the widow of a former Detroit police sergeant, said the bankruptcy -- the biggest municipal bankruptcy case in U.S. history -- threatened to deprive her of her late husband's $3,000-per-month pension, and she does not have Social Security benefits. She said losing the pension would lead her "directly onto the welfare roll."

Paulette Brown, a retired manager in the Detroit Water and Sewerage Department, said she fears losing the pension she earned during nearly 30 years with the city.

Bruce Bennett, a lawyer for the firm handling the bankruptcy, told Rhodes it's "impossible to argue with assertions that retirees should be paid what they earned" and bankruptcy managers are looking for w way to distribute as much money as possible to them.

"Our entire team remembers there is a human dimension to all of this," he said.

Bennett said the city's bankruptcy team is trying to maximize how much money is distributed to retirees and other creditors, the newspaper said.

"It is extremely important to possibly mitigate any harm that results from the financial condition of the city," Bennett said.

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