City of Detroit asks court to appoint committee to represent retirees

By Caroline Salls

Pittsburgh, July 19 - The City of Detroit asked the U.S. Bankruptcy Court for the Eastern District of Michigan to appoint a committee of retired employees for its Chapter 9 case, according to a Friday court filing.

The proposed committee would 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 was $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."

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

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