Ruling Isn’t a Free Pass for Cities To Cut Pensions, Experts SayOctober 2, 2014 – In The News
Michael A. Sweet was quoted in The New York Times article, “Ruling Isn’t a Free Pass for Cities To Cut Pensions, Experts Say.” Full text can be found in the October 2, 2014, issue, but a synopsis is below.
Judge Christopher Klein ruled Wednesday that cities could use bankruptcy to wipe away pension debt. But the ruling is not a free pass for cities to cut pensions, attorneys noted.
“It’s not binding on any other bankruptcy court,” said Michael A. Sweet.
“This is very high stakes for everyone, but CalPERs probably has the most exposure,” Sweet said. “The thing they certainly don’t want is a ruling from the judge.”
While Sweet said he did not expect cities to go flocking to bankruptcy court, he did note that the judge’s statements would provide them some leverage in trying to negotiate discounts in termination fees with CalPERs.