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Partner Craig Barbarosh Comments on Detroit's Proposed Cuts to Retiree Benefits in Law360

Firm News | April 3, 2014

Craig Barbarosh, a partner in the Insolvency and Restructuring practice, spoke with Law360 regarding Detroit’s proposal to lower police and fire retirees’ benefits. As part of a strategy to have the city out of Chapter 9 by late summer or early fall, the proposed plan would reduce police and fire retirement system pensioners’ benefits by six to 14 percent—more than the four or 10 percent reductions included in an earlier proposal. Craig called the plan “more aggressive than people anticipated,” while noting that Detroit’s tactic of getting retirees to accept greater cuts is likely part of a larger strategy to be as fair to all creditors as possible. He added that the proposal will almost certainly be subject to extensive discussions, scrutiny and challenges that will require resolution before confirmation by US Bankruptcy Judge Steven W. Rhodes, making it too soon to tell if it will adversely affect the city’s momentum: “A lot probably will change. There will probably be a lot of legal challenges and maneuvering by all the different groups.” (“Proposed Cuts Will Heat Up Detroit’s Battle With Retirees,” April 2, 2014)