As expected, after listening to Jeremy Coffee, the attorney for the NMIRF, request that Bankruptcy be allowed to continue, Judge Faris still dismissed the case.
The notes below are not an official transcript and based solely on recollection. they may contain some errors. Here are the points as I recalled them (please correct me if needed):
- Attorney for the Fund, Jeremy Coffee of Brown & Rudnick, was given an opportunity to present his argument as to why the Bankruptcy Case should NOT be dismissed.
- During Coffee’s presentation the Judge asked a few questions and made some statements:
- When arguing that the Fund was not serving a government function Coffee said that employees remit their personal money to the fund. The Judge qualified this by asking Coffee if the employee payments were voluntary or mandatory. Coffee responded that they were mandatory.
- When arguing that the Fund was not serving a traditional function the Judge reminded Coffee that the function is explicitly written into the CNMI Constitution.
- when Coffee told the Judge that the case had to remain in bankruptcy court in order for the debtor to utilize the special tools available to help collect money owed from the government, Judge Faris asked Coffee, “what special tools and powers he thought that the Bankruptcy Courts had that would aid in collection of outstanding judgement against the Government?” The judge was not aware of any special powers that would have to aid in collection of debts to the debtor. Coffee had no specific answer but mentioned something about the hope that it would have been possible.
- After Coffee was done, the Judge opened the floor to ANYONE that was present that would like to speak out in favor of NOT dismissing the lawsuit. Ruth Tighe took the podium and stated that she was in favor for these reasons:
- Allow Restructuring benefits
- Remove from local interference
- Prevent liquidation
- Collect on the Judgement
- After listening to both Coffee and Tighe, the Judge verbally granted the Dismissal of the Petition for Bankruptcy by the NMIRF.
- A request was made by Attorney M Bronster, attorney for the Roe/Doe plaintiffs, for Faris to reconsider his statement made in the Tentative Dismissal Ruling in which he stated that only recourse lies with the local government. Bronster pointed out that on-going litigation in Federal Court is still active and a very viable path towward remedy outside of the local government. Faris agreed and said he will reword it as to not exclude Federal Court remedies outside of Federal Bankruptcy Court.
- Coffee requested that Professional Agreements be discussed. Faris granted this.
- All parties agreed to the retention of the Fund Attorneys (Coffee and Huesman) and the Actuary, Buck Consultants through pre and post petition.
- Gelber objected to Huesman being allowed to collect fees without overview from Bankruptcy Court as he requested. I didn’t fully understand what Gelber was requesting in full detail so click here for his filed Docket 109 on the Huesman matter and the role he will play.
- I believe all attorneys will have to process fee payment requests through the Bankruptcy Court.
- Coffee asked for the Judge to sit on his Order of Dismissal in order to give Brown Rudnick time to discuss future steps, including the possibility of appeal, with their client (the Fund). And, the Judge responded that there would be a period of time before his actual written Order is out and he mentioned “14 days” or so. I’d like retirees to understand that things remain as they are at least for the 14 days the Judge mentioned.
- Before ending the Judge stated that the way the government has treated the Fund is shameful. He was also appalled after reading in our local news that active employees were even attempting to withdraw money from the NMIRF. He found that just as shameful.
If you were in court and would like to clarify any points above or add to them please email the site. No recorders were allowed and I had to write this from memory.
More to come.
Pity…..that is…..the FIESTA on a sinking ship begins….last one on the food line will be without a plate and sadly, no food left as well….so this ship will sink and should I throw in the towel too? No. No. No. I’ll use it to soak up water, wipe clean dirt that is, and make a sail out of it along with other rags, and set sail out of this storm since I know this one too will pass. Calmer waters await. A fair wind will blow, and a smoother ride we will have. Pity….the sharks had their share, the veteran had his stomach full, and I, still a deckhand like Billy Budd have anoose around my neck….I’d be a dangling here and there at the mercy of Uncle Ben. So now Bruce wil be my hero….which “B” do I chose? Cerainly not Judge “G”…but then let me see. What will it be? SS or DBP? certainly not DCP. What nonesense I’ve gotten myself in. Can somebody throw me a raft or a life line? I’ll gladly help others get on the raft and hold on to the line. I’ll stay on this ship. sink or sail I’ll risk it praying it will not sink.
hi oscar,
it is a mess and a dreadful pity. but, from everything i have researched and discussed with others, the dismissal of the bankruptcy is not a pity.
i know the Fund attorneys often stated that they went with bankruptcy to help go after the government for what it owes the Fund. as Judge Faris eluded to today, Bankruptcy Court would most likely not have aided in those efforts. the judge himself was aware of no tools in bankruptcy court that would have been useful in collecting debts owed to the debtor. of course, by the time the members found that out though, it would have been too late and the case would have been ongoing. thankfully he dismissed it.
the purpose of Bankruptcy is to protect the debtor. the creditors take a back seat.
as Bronster stated today and Judge Faris acknowledged, there is another solution. the fund is not left at the mercy of the local government and their attempt at a Declaration of Emergency. all the DBP members can back the Roe/Doe case that was brought to Federal Court 3 years ago.
Receivership brought forth by the creditors (members) would put their needs and concerns first and should truly allow the DB members the tools to go after the government for what they owe. the Federal Courts have already done so in the past in other cases with judgments in Superior Court being enforced in District Court (not through bankruptcy court but Federal District Court).
some have argued that Receivership is guaranteed liquidation. that is not true. if not requested by those pushing for Receivership, it is a remote possibility. Chapter 11 could very well have ended in liquidation too. it was stated as clearly in the Fund’s own notice to their member : “Chapter 11 allows a debtor to reorganize or liquidate pursuant to a plan.”
some have said that Receivership would mean cuts to benefits. what did the Fund just attempt to do in Bankruptcy Court. they did not hide the fact that their main purpose was to cut benefits by 52%.
some have argued that they have a distaste for a certain attorney in the Roe/Doe case. at the moment he is one of many other attorneys handling the case. it would be good if those who are upset with that attorney put aside their personal grudges. Bronster in Hawaii and Woodruff locally are also on the Roe/Doe case.
i have never been against the Roe/Doe case and always thought it was the best course of action – it removed the case from local hands, gave the members the tools available in Federal Court to collect on the judgement and put the members needs first over the government (and the Fund, which the court today said they were an instrument of).
for the sack of all DBP members i do hope that they chime in as they did with the Bankruptcy and support Federal Court assistance in helping the DBP members.
Coffee, himself, stated the reason why it is so important for the Fund case to be taken out of local courts and away from the grasp of this administration.
Glen, you might want to add also that aside from the Judge being appaled by the active members trying to get their money out which he said was “a shame” , he also said it was a “shame” how the government has treated the retirees, and that it was “a shame” that the retirees are in this dilemma they are in now.
Those who support the bankruptcy because they say it would have given the Fund Trustees the tools to collect the money from the government should stop and think WHY JUST NOW THE FUND IS FILING ALL THESE LAWSUITS IN THE DISTRICT COURT AGAINST ALL THOSE WHO OWE THE FUND? Why couldn’t they have done that way back to aggresively try and collect the money owed. They could have done that without filing bankruptcy.
With all the auditors they have hired, why are they just now attempting to collect over payments…. some dating back over decade ago?
Now Coffey is talking about the possibility of appeal. NO MORE SYPHONING the already dwindling funds!!! The bet is, an appeal will result in the same decision by the judge. If they really want to help the retirees, then do away with all these highly paid attorneys and give the money to Attorney Bronster to continue the Roe and Doe case before the District Court. ENOUGH SYPHONING OF THE FUND BY ATTORNEYS who are only helping the Fund exhaust it’s money faster than one can blink an eye.
i do wish the Fund align itself with you. i do wish it. i wish receivership be in the form where the entire program is sold to an annuity company (an insurance company like Prudential or New York Lfe) and have that company strike a deal with the CNMI government to pay for what is required to make the program work for all members……This way the program is out of the government and the government has a deal with an outside company administering the entire program. The numbers are finite so are the dollar amounts. This can be done under current conditions…..oscar