Finance

Retiree Groups Sue Detroit on Eve of Bankruptcy Trial

October 23, 2013
 

Several retiree groups sued Emergency Manager Kevyn Orr and the city Tuesday over steep cuts to health insurance plans.

The federal court lawsuit comes one week after Orr announced sweeping changes to health insurance for active and retired workers slated to take effect Jan. 1, and on the eve of a trial that will determine whether Detroit is eligible for Chapter 9 bankruptcy relief.

The retiree groups want to block Orr from implementing the cuts and to reinstate current benefits.

“The impact of the city’s decision on the retirees will be devastating,” lawyer Matthew Wilkins wrote in the lawsuit. “To obtain comparable healthcare benefits, many of them will be forced to go out of pocket an additional several hundred dollars per month and several thousand dollars per year.

“The city's decision to walk away from its retirees, all of whom devoted large portions of their gainful years working on its behalf, is unconscionable.”

The city and Orr were sued by the official committee representing retirees in the bankruptcy case, the Detroit Retired City Employees Association, the Retired Detroit Police and Fire Fighters Association and the American Federation of State, County & Municipal Employees Chapter 98.

The health care changes mark the first major dent Orr is attempting to put in the city's legacy costs at the center of Detroit's bankruptcy case as he seeks to shift more of the cost burden onto employees and retirees.

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