The 2013 Pension 40: Kevyn Orr

On June 16, Kevyn Orr, emergency manager for the city of Detroit, sent a letter to Michigan Governor Richard Snyder recommending that the municipality file for Chapter 9 bankruptcy protection. The historic center of America’s automobile industry, Detroit could no longer withstand its protracted decline. Snyder appointed Orr — a noted bankruptcy lawyer who had represented local carmaker Chrysler Group in its 2009 restructuring — in March after a committee that the governor had established to review the city’s dire finances proposed hiring an emergency manager. The committee found that Detroit’s pension deficit was $3.5 billion, much higher than previously thought. Labor representatives and pension beneficiaries disputed both the figure and the city’s Chapter 9 filing, made two days after Orr’s letter. The emergency manager cited the size of the deficit as a big reason Michigan should seek to reorder Detroit through the bankruptcy code. (In late October, Judge Steven Rhodes of the U.S. Bankruptcy Court for the Eastern District of Michigan was deciding Detroit’s eligibility for bankruptcy.) Orr, 54, who grew up in Florida and earned a JD from the University of Michigan, has sought to have the city’s pension beneficiaries treated like regular creditors, making it more likely that they’ll end up with less. He’s also trying to reorganize Detroit’s public pension funds: In September he unveiled a proposal to freeze benefits for existing employees and move new beneficiaries to a 401(k) system.