Detroit Bankruptcy Ruling Nears The End
The Chapter 9 bankruptcy woes that have hit Detroit are starting to come to a resolution. Judge Steven Rhodes believes that a ruling on the bankruptcy issues will end sometime during the week of November 3rd, with proceedings starting as early as October 27th. Closing arguments will be conducted on Tuesday, October 28th and Wednesday, October 29th. Judge Rhodes made an executive decision to wait until after the general elections in Michigan to be conducted, before moving forward with this process. This finalization will finally put the largest Chapter 9 bankruptcy case in United States history to rest.
What Happened To The 13th Checks?
Recently, Judge Rhodes stood his ground against the UAW and the American Federation of State, County, and Municipal Employees Local 25. These two organizations claimed that they were being stalled their ‘13th check.’ The 13 check implementation started as way to provide payments to retiree’s, and hasn’t seen movement since late 2011. The AFSCME explained that the bankruptcy proceedings did not even gloss over the 13th checks, and was determined to push them through. Rhodes explained the 13th checks were not a part of the bankruptcy issues, due to the extremely high costs they put onto the city of Detroit.
New Health Care For Detroit Public Library Workers & Cobo Center Retiree’s
To offer more assistance in the way of retiree’s, Rhodes and Heather Lennox, lawyer for Detroit, offered a new health care initiative. The Voluntary Employee Benefit Association, or VEBA, would provide health care for those who have worked for both the Detroit Public Library and Cobo Center. In total, 336 workers would be added to the new VEBA plan. Sam Alberts, a lawyer representing the retirees explained that the new group of over 300 workers had concerns about the new health care plan. Rhodes dismissed his question, and urged him to resolve the concerns internally.
Judge Rhodes faces some difficult tasks over the upcoming weeks. Overall, he is required to determine the feasibility of the current bankruptcy plan, and if it will do justice to the creditors or legal issues that Detroit has faced in recent years. Currently, the plan will allow Detroit to waive $7 billion of the total $18 billion in debt, along with spending nearly $1.5 billion towards blight and city improvements. If he accepts the plan, Detroit will have a solid blueprint to improve financially in the future.