Detroit retiree committee appointment approved; court sets timeline

By Caroline Salls

Pittsburgh, Aug. 2 - The City of Detroit's motion for appointment of a committee of retired employees for its Chapter 9 case was granted Friday by the U.S. Bankruptcy Court for the Eastern District of Michigan.

The committee will act as the authorized representative of former city employees and their beneficiaries who are entitled to receive pension benefits and health and other post-employment welfare benefits.

Detroit said its retirement benefit obligations constitute the largest unsecured obligations to be addressed in this case.

According to the motion, the city's actuaries estimated that its combined unfunded actuarial accrued liabilities to its retirement systems were $3.5 billion as of June 30.

In addition, Detroit said the present value of its expected post-retirement benefit obligation to all retirees was estimated to be $6.4 billion.

"Simply put, the city cannot successfully restructure unless it addresses its crippling unfunded retirement benefit obligations," the motion said.

"The city believes that the retiree committee will serve as an important participant in the efforts to restructure the city's retirement benefit obligations, which necessarily must be a key component of any plan of adjustment in this case."

In addition, the court set the timeline for the city's Chapter 9 case.

Specifically, the trial for objections to Detroit's Chapter 9 eligibility will begin Oct. 23, and the deadline for the city to file a plan of adjustment will be March 1, 2014.

The yet-to-be-formed retiree committee will have 14 days until after it obtains counsel to file eligibility objections.

In addition to the eligibility trial and plan deadline, the court set an Aug. 19 deadline for filing eligibility objections, an Oct. 17 deadline for filing pretrial briefs and an Oct. 21 pretrial conference.

Additional dates for the eligibility trial, if necessary, are Oct. 24, Oct. 25, Oct. 28, Oct. 29, Nov. 4, Nov. 5, Nov. 6, Nov. 7 and Nov. 8.

Detroit filed bankruptcy on July 18 under Chapter 9 case number 13-53846.

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