UAW lawyer knocks Detroit over pre-bankruptcy acts

AP News
Posted: Nov 05, 2013 1:57 PM
UAW lawyer knocks Detroit over pre-bankruptcy acts

DETROIT (AP) — The UAW's chief lawyer testified Tuesday that he was willing to take the lead in negotiating retiree health care with Detroit but never got a response from emergency manager Kevyn Orr before the city filed for bankruptcy.

Michael Nicholson portrayed Orr and his team as inflexible in the weeks leading to the July bankruptcy filing. He said attendees weren't always free to speak at private meetings with Detroit attorneys about the city's poor finances and instead were required to put questions on cards.

"I've never been in negotiations where only one side speaks," Nicholson said.

He testified during the seventh day of a trial to determine if Detroit is eligible to restructure $18 billion in debt in the largest public bankruptcy in U.S. history. Unions and pensions funds opposed to bankruptcy claim there was a lack of good-faith negotiations with creditors before the Chapter 9 filing. If a judge finds that's true, he could throw out the case.

Nicholson acknowledged the UAW had no interest in negotiating pension cuts because public pensions are protected under the Michigan Constitution. But he said he was willing to put together a coalition to talk about health insurance.

"Mr. Orr never responded. ... They never took us up on it," Nicholson testified.

Orr has defended his actions with creditors before the bankruptcy filing, noting that four weeks passed between a meeting to describe the city's poor finances and the bankruptcy filing.

Before lunch, former Michigan state Treasurer Andy Dillon, a key player in trying to fix Detroit's finances, began testifying as a witness called by unions. He left office last week.

"It was always a last-resort option for us," Dillon said of bankruptcy.


Follow Ed White at