Tag Archive for U.S. Bankruptcy Judge Steven W. Rhodes

Conservative News, Cronyism, Democrats, Detroit, Government Incompetence, Michigan, Michigan Politics, Part Time Legislature, Republicans

The DPS Bailout – The Bankruptcy Alternative Not Taken

by  •  • 1 Comment

Part I - No, The Richmond USD Case Did Not Challenge U.S. Bankruptcy Court Authority

Daniel Howes ImageGovernor Snyder browbeat the Michigan Legislature to approve the $ 617 million bailout of Detroit Public Schools which he signed today by regaling them with a parade of horribles which would occur if the bailout was defeated and DPS was forced to file for bankruptcy. Daniel Howes regurgitated Governor Snyder’s compelling tales of impending doom delivered behind closed doors in a Detroit News article, but was any of it true?

Right at the top of Governor Snyder’s parade of horribles was the Federal bankruptcy filing of the Richmond [California] Unified School District on April 19, 1991 . Governor Snyder portrayed the outcome of this action as the U.S. Bankruptcy Court denying the petition and ordering the State of California to financially bail out the district.  From Daniel Howes’ article:

There is scant precedence for school districts filing for bankruptcy, the Snyder administration found. In 1990, according to an administration letter to state Rep. Laura Cox, R-Livonia, the Richmond Unified School District in Northern California filed for bankruptcy because of $42.5 million in debt. The judge ruled the district could not be protected by the court in bankruptcy and ordered the state to provide the district with operating funds.

Nothing could be farther from the truth.

READ MORE ►

You Betcha! (8)Nuh Uh.(0)

Cronyism, Democrats, Detroit, Government Incompetence, Michigan, Michigan Politics, Part Time Legislature, Proposal 15-1, Republicans, Taxes

Forensic Audit – Now!

by  •  • 7 Comments

Rhodes Image 1aRetired U.S. Bankruptcy Judge Steven W. Rhodes, now the Detroit Public Schools’ ‘Transition Manager’, just let another financial whopper out of the bag. Detroit Public Schools received about $30 million in U.S. Department of Education reimbursements for the pensions of grant-funded employees, but failed to forward those federal funds to the Michigan Public School Employees Retirement System. So DPS owes MPSERS $ 30 million dollars, give or take. They are ‘negotiating’.

DPS officials knew of this funds misappropriation in December 2015. Judge Rhodes knew “in March 2016”. Before or after the Michigan Legislature got suckered into passing HB 5296 and HB 5385, the DPS emergency bailout and purported financial review commission?  HB 5296, the $ 48.7 million emergency DPS bailout, cleared the Michigan House on 17 March and the Michigan Senate on 24 March. Governor Snyder signed it as Public Act 54 on 12 April.

Did anyone in Lansing know that 60% of the PA 54 DPS bailout was headed straight to the MPSERS?

If so, why did they not share this little detail with the rest of the Legislature and the public prior to the passage of HB 5296?

READ MORE ►

You Betcha! (13)Nuh Uh.(0)

Cronyism, Democrats, Detroit, Government Incompetence, Michigan, Michigan Politics, Part Time Legislature, Rent Seeking, Republicans, Taxes

Whoopie Ti Yi Yo, Git Along Little Dogies

by  •  • 19 Comments

Cattle Roundup Image 1

Whoopee Ti Yi Yo, Git Along Little Dogies

Some boys goes up the trail for pleasure,
But that’s where you get it most awfully wrong;
For you haven’t any idea the trouble they give us
While we go driving them all along.

Whoopee Ti Yi Yo, Git Along Little Dogies

When the night comes on and we hold them on the bedground,
These little dogies that roll on so slow;
Roll up the herd and cut out the strays,
And roll the little dogies that never rolled before.

Whoopee Ti Yi Yo, Git Along Little Dogies

Traditional 19th Century American Cowboy Cattle Drive Song

Rhodes Image 1aMichigan’s tax-and-spend establishment continues to demonstrate world class tactical flexibility as they pursue their dubious ends. Their latest tour de force is the setup for the impending Detroit Public Schools bailout. Michigan’s legislators are being driven like cattle.

The new state appointed emergency transition manager of the Detroit Public Schools, retired U.S. Bankruptcy Court Judge Steven W. Rhodes, announced that the district would shut down on April 8th due to a lack of funds. This chilling announcement came a week after Governor Snyder appointed him to replace Darnell Early, who resigned at the end of February. Darnell Early, for some reason, failed to inform Michigan of the April 8th drop dead date. Judge Rhodes made his announcement four weeks in advance of the projected shutdown in a full court press to get a bailout from our State Legislature.

Detroit Public Schools LogoThe first problem here is the State Legislature is scheduled to take two weeks off in the four weeks leading up to April 8th. The last week of March and the first week of April. Judge Rhodes certainly knew this, so the dilatory announcement is unquestionably a deliberate effort to stampede the Michigan Legislature into immediately delivering $ 50 – 70 million to DPS, no questions asked. Two weeks is not a reasonable legislative time frame, rather it is herding legislators like cattle on a two week drive. An echo of the tactics used by Judge Rhodes to ram through the bungled Detroit bankruptcy.

Governor Snyder has been floating an inchoate plan to rescue the Detroit Public Schools since the middle of last year; one which originally envisioned the creation of a ‘bad debt’ shell district and a new, debt free district by cellular division. Wasn’t really well received anywhere, even after he added dissolution of the much hated Education Achievement Authority. As his problems in the Flint water fiasco have mounted, Governor Snyder decided to wash his hands of the DPS situation by throwing $ 700 million at them to extinguish their ‘operating’ debt and return control to the next generation of local thieves elected school board members.

READ MORE ►

You Betcha! (14)Nuh Uh.(0)

Cronyism, Democrats, Detroit, Government Incompetence, Michigan, Michigan Politics, Republicans

Yet Another Government Triumph in Michigan

by  •  • 10 Comments

Rewarding Incompetence and Corruption With Your Tax Dollars

Snyder Duggan Orr Image aMayor Mike Duggan startled Michigan yesterday by disclosing that Detroit found the actuarial accrued liability (AAL) in their pension plans to be $ 491 million higher than that calculated in their U.S. Bankruptcy Court Plan of Adjustment. The very expensive Detroit bankruptcy consultants used an outdated version of the IRS Static Mortality Table when calculating Detroit’s future pension payments. Detroit’s unfunded actuarial accrued liability (UAAL) was not the $ 731 million stated in the Plan of Adjustment, rather it was $ 1.222 billion. Big money in a city whose total governmental revenues were $ 1.415 billion in FY 2014. Mayor Duggan blames erstwhile Emergency Manager Kevyn Orr for this little oversight, but others were also responsible.

GLWA Detroit Seal ImageNo word yet from the Great Lakes Water Authority whether all those Detroit Water & Sewerage Department employees they absorbed from the City of Detroit have the same AAL calculation error in their pension funding schedules. You can bet they did, and the suburban geniuses politicians who spent a year doing due diligence also missed it. The DW&SD pension funding schedules were determined by the same very expensive bunglers who wrote the Detroit Plan of Adjustment.

READ MORE ►

You Betcha! (16)Nuh Uh.(0)