Tag archive for bankruptcy

Watch door to bankruptcy slam shut to protect pensions

In the wake of Judge Klein’s ruling last week that Stockton could cut pension debt in bankruptcy, fiscal reformers and conservative commentators where quick to assume, somewhat naively, that this ruling changed everything and would force recalcitrant unions to the negotiating table. The truth, however, is that many states put up numerous roadblocks to municipal bankruptcy and the real import of the ruling was that states where public unions dominate were likely to throw up even more blocks. Now we’ve seen the first indication of this…

Kentucky pensions: From worst to ‘worster’…

Things just keep getting uglier for what may be the country’s worst-run state government pension system (and that’s saying a lot). In the wake of an unprecedented bankruptcy court ruling last Friday that a nonprofit could exit the state’s government worker pension system, the pension system now faces a revolt led by the city…

Stockton must face last angry creditor

Bankrupt Stockton heads to court on Monday to win approval for its plan to exit Chapter 9, but it still has not crafted an agreement with one The-U.S.-Government-Is-Our-Biggest-Creditor-and-Other-Statisticsmajor creditor, Franklin Advisers, which is being asked to take a gigantic haircut in the case. Instead, Franklin will argue that Stockton hasn’t done enough to cut its debts, especially its pension costs.If Franklin can’t persuade U.S. Bankruptcy Judge Christopher Klein to force Stockton and Calpers to come to some kind of deal reducing the city’s pension debts…

Is it time for Scranton to go bankrupt?

A 2011 Pennsylvania Supreme Court decision which forced the struggling city of Scranton to adhere to a $21 million arbitration ruling in favor of employees is now also helping drain the city’s deeply indebted pension system. The pension system, with $150 million in unfunded liabilities, has just learned that it must come up with somewhere between $7 million and $10.5 million in additional dollars because retirees are entitled to some of the raises ordered by the court. All of this is money the insolvent city, which famously cut worker pay to the minimum wage two years ago, doesn’t have..

What you need to know about Detroit’s bankruptcy (and what comes next) in less than 6 minutes

Stephen Eide on the path ahead for the city of Detroit on FOX Business Network’s “Markets Now.”

Watch the latest video at video.foxbusiness.com
If you’re in the mood for more on the topic, last night on CNBC’s “Money and Politics” Steven Malanga told Larry Kudlow like …

We can’t embrace the ‘it must get worse’ line of thought

Covering state and municipal finance issues in California can be terribly frustrating. Reformers — no matter how sound their data and sage their advice — lose virtually every battle. Unions and their Democratic allies depict us as corporate shills who want to destroy the livelihoods …

Ky. nonprofit goes bankrupt with public pensions

A mental health agency in Kentucky that participates in the state’s public employee pension plan is filing for bankruptcy after the state legislature passed pension reforms that would dramatically increase contributions into Kentucky’s severely underfunded pension system. Seven Counties Services, a nonprofit, is shutting down …

San Bernardino rolls over after Stockton verdict

Some pension reformers have taken heart in U.S. bankruptcy Judge Christopher Klein’s Monday decision allowing the city of Stockton to proceed with its bankruptcy over objections by capital market creditors who say it’s unfair that the city plan failed to take on the city’s payments …

Taxpayers are losers in Stockton, no matter what

In the last several days I’ve been asked by media outlets a number of times whether the bankruptcy judge’s ruling on Monday that Stockton’s Chapter 9 filing can go forward represented a victory for taxpayers. If so, it’s a hollow victory, at best. The judge himself made that clear in the text of the ruling, in which he elaborated on the depredations currently being suffered by Stockton residents. I know that some think that Chapter 9 is a great way to give unions their comeuppance by voiding contracts and reducing retirement benefits, but taxpayers are  always the losers by the time we get to the point that a city qualifies for bankruptcy, as the judge ruled. It’s worth listening to some of the judge’s descriptions of what’s going on in Stockton.  

Stockton bankruptcy protects pensions above all else

Not even Stockton city officials dispute the cause of the San Joaquin Valley city’s fiscal problems: unsustainable benefits secured by public-sector workers and other poor spending priorities. Councilwoman Kathy Miller, on the stand at the bankruptcy trial held at the Sacramento federal courthouse, was questioned …