Detroit's emergency manager says he "wasn't attempting to mislead anyone" earlier by saying vested public pensions are “sacrosanct” and "can't be touched" in this state, even though he proposed cutting retirees' checks just four days later.
Robert Snell and Chad Livengood report in The Detroit News on Monday morning's federal court testimony in a trial to determine whether Detroit's bankruptcy filing is legal.
Kevyn Orr, the appointed emergency manager, says he clarified at a public meeting five months sago that all creditors may have to share in the pain of paring down an estimated $18.5 billion in debts and long-term liabilities.
An attorney for the city’s pension funds showed video of Kevyn Orr’s June 10 public comments in court last week, suggesting he misled a retiree just days before he rolled out a plan to creditors on June 14 that called for paying pensioners as little as 20 cents on the dollar for a $3.5 billion unfunded liability.
“Despite the implications, I wasn’t attempting to mislead anyone,” Orr testified Monday under questioning from city attorney Greg Shumaker.
Orr’s answer caused U.S. Bankruptcy Judge Steven Rhodes to interrupt with a follow-up question. “Excuse me one second,” the judge said. “What would you say to that retiree now?”
“I would say his rights are in bankruptcy now,” Orr told the judge. “I would say his rights are subject to the supremacy clause of the U.S. Constitution.”
“That’s a bit different than sacrosanct, isn’t it?” Rhodes replied.
