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The 2014 Pension 40: Christopher Klein

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Christopher Klein
Chief Judge
U.S. Bankruptcy Court for the Eastern District of California
Last year: 24

Few judges possess the power of bankruptcy judges. And few bankruptcy judges have the power of those who preside over municipalities that have staggered into Chapter 9, where precedents are scarce. For the past few years, Christopher Klein, 68, chief judge of the U.S. Bankruptcy Court for the Eastern District of California, has overseen the insolvency of the city of Stockton, which expected to continue to pay its biggest creditor, the California Public Employees’ Retirement System, $30 million a year to provide public workers’ retirement benefits. Klein wasn’t so sure that was necessary. In late September he defied CalPERS, which threatened to impose a lien of $1.6 billion on Stockton if the city bailed out of the system. “The bankruptcy code provides that the lien can be avoided and be treated as an unsecured claim,” said Klein, who has an MBA and a JD from the University of Chicago. The judge noted that the city could legally stiff Cal­PERS or even eliminate pensions entirely. His ruling sent a shock through the nation’s largest defined benefit pension plan (whose CIO, Ted Eliopoulos, is No. 11 on the Pension 40). A month later, however, Klein approved the Stockton reorganization plan, which traded severe bondholder haircuts — including cuts to Franklin Templeton, which had brought the dispute to Klein in the first place — for continued annual payments to CalPERS, some 20 percent of the municipal budget. “It would be no simple test to go back and redo the pensions,” Klein admitted. But his message had been sent: Pensions are on the table.

The 2014 Pension 40

1
2
3
4
5
Bruce Rauner
Illinois
John and
Laura Arnold

Laura and John
Arnold Foundation
Randi Weingarten
American Federation of Teachers
Rahm Emanuel
Chicago
David Boies
Boies, Schiller & Flexner
6
7
8
9
10
Randy DeFrehn
National Coordinating Committee for Multiemployer Plans
Damon Silvers
AFL-CIO
Laurence Fink
BlackRock
Chris Christie
New Jersey
Robin Diamonte
United Technologies Corp.
11
12
13
14
15
Ted Eliopoulos
California Public Employees’ Retirement System
John Kline
Minnesota
J. Mark Iwry
U.S. Treasury Department
Gina Raimondo
Rhode Island
Phyllis Borzi
U.S. Labor Department
16
17
18
19
20
Orrin Hatch
Utah
Abigail Johnson
Fidelity Investments
Ted Wheeler
Oregon
Caitlin Long
Morgan Stanley
James Hoffa
International Brotherhood of Teamsters
21
22
23
24
25
Amy Kessler
Prudential Financial
Alejandro
García Padilla

Puerto Rico
Christopher Klein
U.S. Bankruptcy Court for the Eastern District of Caifornia
Steven Rhodes
Bankruptcy Court for the Eastern District of Michigan
Kevin de León
California
26
27
28
29
30
David Draine
Pew Charitable Trusts
Jordan Marks
National Public Pension Coalition
Sam Liccardo
California
Joshua Rauh
Stanford Graduate School of Business
Karen Ferguson and Karen Friedman
Pension Rights Center
31
32
33
34
35
Timothy Blake
Moody’s Investors Service
Kathleen Kennedy Townsend
Center for Retirement Initiatives, Georgetown University
Edward (Ted) Siedle
Benchmark Financial Services
Daniel Loeb
Third Point
Judy Mares
Employee Benefits Security Administration, U.S. Labor Department
36
37
38
39
40
Andrew Biggs
American Enterprise Institute
Andy Stern
Columbia University
Kenneth Mehlman
KKR & Co.
Teresa Ghilarducci
New School for Social Research
A. Melissa Moye
U.S. Treasury Department


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