Calpers Weighs in on Detroit Pension DebateMay 2, 2014 – In The News
Michael A. Sweet was quoted in the Reuters article, "Calpers Weighs in on Detroit Pension Debate." Full text can be found in the May 2, 2014, issue, but a synopsis is noted below.
The California Public Employees’ Retirement System (Calpers), said on Thursday that Detroit’s bankruptcy court was incorrect in ruling that state law does not apply to bankrupt municipalities, a ruling that left the city’s pension funds unprotected.
Calpers has a lot at stake in how public pensions are treated in the Detroit bankruptcy, especially if the city’s pensions end up being cut, said Michael Sweet.
"While not binding on a bankruptcy judge in California, a decision by the Sixth Circuit court in Detroit would certainly be persuasive to a judge applying the same federal bankruptcy law in a California case," he said. "Furthermore, the next step after the Sixth Circuit court in Detroit is the U.S. Supreme Court. If the Supreme Court ever rules on this, it would be the law of the land binding on all courts, including those in California."