A member of the federal judiciary for nearly 27 years, Gerald Rosen devised the Grand Bargain, the plan that helped save the Detroit Institute of Arts and preserved pensions for thousands of retired city workers.
Photo by Robert Chase
Photo by Robert Chase
Book on Detroit bankruptcy saga offers a riveting account of crisis
By Tom Kirvan
Legal News
In July 2013, as the then chief judge of the U.S. District Court for the Eastern District of Michigan, Gerald Rosen was more than just a casual observer as Detroit’s long slide toward insolvency landed like a plane without wings in federal bankruptcy court.
In effect, it was a crash landing that was decades in the making, a real-life municipal tragedy that was the result of years of fiscal mismanagement, a steady drain of population to the suburbs, rising crime and declining schools, and a series of other societal problems that were growing in complexity.
It was Detroit’s version of the “perfect storm,” with unrelenting winds and rain whipping from all directions as the city – and its nearly 700,000 residents – hung on for dear life as their fate rested in the hands of a collection of stakeholders with deep-seated interests.
The story, as it unfolded, was compelling, featuring a cast of characters with decidedly different agendas who somehow came together to save a bankrupt city that had become a punching bag for Detroit critics around the nation.
Judge Rosen initially faced a number of professional and personal crosscurrents and headwinds in considering U.S. Bankruptcy Judge Steven Rhodes’s surprising proposal that he be named the judicial mediator of the Detroit bankruptcy case.
Yet, Rosen eventually agreed to join Judge Rhodes in the “bullseye,” playing a pivotal role in the successful resolution of the bankruptcy case, serving as the primary architect of the “Grand Bargain,” a brainstorm that helped rescue Detroit from financial ruin while also saving the Detroit Institute of Arts (DIA). For his efforts, Rosen has received universal praise, a true testament to his skills as the bankruptcy’s chief mediator.
The decision by Rosen to become a “player” instead of a mere “interested observer” in Detroit’s bankruptcy proceedings is among the many back-stories he tells in the book he has written about the case.
While the book – aptly titled, “Grand Bargain: The Inside Story of Detroit’s Dramatic Journey from Bankruptcy to Rebirth” – was not the first to be written on the largest municipal bankruptcy case in the nation’s history, it offers keen insight and special bang for the publishing buck.
The idea of a “Grand Bargain” began at dawn one day with a doodle by Rosen conceptualizing the leveraging of the city’s only real asset – the DIA – to raise enough money to reduce the city’s $3.5 billion pension debt. Ultimately, the Grand Bargain doodle became a reality, as the concept led to a combined total of $820 million in contributions from the state, various philanthropic organizations, and the DIA itself. The money was used to buy a 10-year pension holiday for the city, thus freeing up other revenues to pay a host of other bankruptcy creditors, according to Rosen.
Fittingly, the doodle now hangs in the DIA, where it will be forever revered as a true work of art.
The book, said Rosen in the introduction to his 356-page work, was written with a desire to “recognize and celebrate the heroes and heroines of the Detroit bankruptcy.” His motivation also was driven by a goal to tell a real-life story about the value of teamwork in troubled times.
“In a time of intense political polarization, partisan dysfunction, and civic irresponsibility, I have written this book to tell the inspiring story of people from all points of the political, demographic, geographic, and cultural compass who came together, many at great risk and sacrifice, to find common ground to save a great city,” Rosen wrote.
“This book is not so much a story about the tick-tock of the bankruptcy case itself as it is about the collective heart of the small group of extraordinary people at the center of the vortex,” he related. “This is the story of those people and the events that consumed them. I hope this story will resonate in every corner of our country where faith in democratic government and civil discourse is flickering.”
Rosen, who has lived at various times in Detroit and once was a legislative aide to U.S. Senator Robert Griffin (R-Michigan), earned his law degree from George Washington University and was a partner with Miller Canfield in Detroit before being appointed to the federal bench in 1989. An All-State tennis player in high school, Rosen has worked most of his professional life in a three-block area of downtown Detroit.
“I had wonderful memories of going downtown for the Thanksgiving parade, shopping with my mother at Hudson’s department store, school visits to the DIA, trips to the old Vernor’s Ginger Ale plant, visits to Palmer Park with my father on Sunday mornings to feed the ducks and later to play tennis,” he fondly recounted.
With a lifelong love of sports, Rosen also had “dozens of memories of the sights, sounds, and smells of old Briggs/Tiger Stadium, of Thanksgiving Day Lions football games, and especially baseball games with my dad, a former minor league player.”
In all respects, Rosen qualifies as a “Detroiter,” a term that he wears as a badge of honor in his place as an author of the city’s journey from “Bankruptcy to Rebirth.”
The bankruptcy case took 16 months to run its course, which is “warp speed in the municipal bankruptcy world,” Rosen indicated. During that time, Rosen was among those who lived it virtually 24/7, wrestling with a series of thorny questions and competing interests that could have derailed progress at any point.
Adding to the challenge was the almost daily sight of angry protesters parading around the entrance to the federal courthouse on Lafayette Boulevard, carrying signs such as “Cancel Detroit’s debt: The banks owe us!” and shouting such comments as “Whose money? Our money!” and “Whose pensions? Our pensions!”
Just days before reaching a decision to serve as the chief mediator, Rosen got a taste of just how difficult an assignment it would be when he drove up to the federal courthouse for work and saw a “horde of media trucks covering a large group of union and retiree protesters marching around the front” of the building.
“The large majority of the protesters were African American, and I was reminded once again of the racial undercurrents beneath the legal and financial issues in the bankruptcy and the possibility of it
creating even deeper schisms in our community,” Rosen wrote in Chapter 3 of the book. “The angry protests also reminded me just how deep the passions and resentments were that underlay the issues in the bankruptcy and of the fact that the different creditor groups would be heatedly fighting not only the city but also each other over the city’s meager assets.”
In writing the book, Rosen chronicled “how a committed group banded together against the odds to bring one of America’s greatest cities back from the brink,” said Darren Walker, the president of the Ford Foundation, one of the many philanthropic organizations that donated millions to make the Grand Bargain a reality. “This isn’t just a story about a deal being made; it’s an inspiring example of people mobilizing to act on behalf of a city and its people.”
Walker is among the luminaries who have offered praise for Rosen’s book, writing glowing testimonials that are emblazoned on the jacket cover. They include: former Michigan Governor Rick Snyder; Detroit Mayor Mike Duggan; Dan Gilbert, chairman of Rocket Companies; Rip Rapson, president and CEO of the Kresge Foundation; Nolan Finley, editorial page editor of The Detroit News; and Kevyn Orr, partner-in-charge of the U.S. offices of Jones Day and the former emergency manager for the City of Detroit.
A touch of special praise also was offered by Bill Liebold, who served as chief of staff for Michigan Governor James Blanchard.
“He said if there was a Pulitzer Prize for chapter titles, the book would win it,” Rosen said proudly, referring to such gems as “The Haircut at the Haircut,” “A Lube Job and an Oil Change,” “The Christmas Eve Massacre,” and “‘That Was the Most Expensive Breakfast in History!’”
Judge Rhodes, who retired from the bench in 2015, wrote the foreword to the book, distilling in understandable and blunt terms how Detroit got into such a financial mess.
“For years, the governments of the city of Detroit and the state of Michigan failed in their responsibility to the people of Detroit to secure their inalienable rights,” Rhodes said. “That failure had to be reversed. A path to achieve that new direction had to be created, and it had to be created in this bankruptcy case.”
Rhodes singled out three groups for special praise in the successful resolution of the bankruptcy case. Heading the list was the city’s pensioners, “whose votes in support of the Plan of Adjustment that cut their pensions were immeasurably hard votes to cast,” Rhodes said.
He also saluted all of the attorneys representing the various parties involved in the case, noting that “they proved that zealous advocacy can exist in the same courtroom . . . as professionalism and civility.”
In particular, Rhodes lauded attorney Kevyn Orr, who had an especially unenviable task.
“Among the professionals, Kevyn had the single most challenging job – to simultaneously manage both the city’s government and its prosecution of the bankruptcy case, all while many people let him know that they did not approve of what he was doing.
“Equally deserving of high praise and recognition here is Judge Rosen himself, along with his team of mediators,” Rhodes wrote. “My decision to appoint him as the mediator was the smartest decision I made in the case. He was committed, relentless, creative, smart, and politically savvy. And he loves Detroit. He and his team worked miracles in pursuing and achieving settlements with one group of creditors after another until all of the creditor groups had settled with the city.”
In closing, Rhodes said the book is a must-read for one sector of society especially.
Politicians.
“We elect them and charge them with the responsibility to break through their long-standing and entrenched conflicts and come together to find and execute workable solutions to the problems we face,” he said. “They need to study this book, for chapter after chapter of it lays out for them an effective road map for bringing people together to resolve conflicts and to solve problems, all for the common good and to make our lives better. And this book also lays out for them proof that this road map can work.”
Legal News
In July 2013, as the then chief judge of the U.S. District Court for the Eastern District of Michigan, Gerald Rosen was more than just a casual observer as Detroit’s long slide toward insolvency landed like a plane without wings in federal bankruptcy court.
In effect, it was a crash landing that was decades in the making, a real-life municipal tragedy that was the result of years of fiscal mismanagement, a steady drain of population to the suburbs, rising crime and declining schools, and a series of other societal problems that were growing in complexity.
It was Detroit’s version of the “perfect storm,” with unrelenting winds and rain whipping from all directions as the city – and its nearly 700,000 residents – hung on for dear life as their fate rested in the hands of a collection of stakeholders with deep-seated interests.
The story, as it unfolded, was compelling, featuring a cast of characters with decidedly different agendas who somehow came together to save a bankrupt city that had become a punching bag for Detroit critics around the nation.
Judge Rosen initially faced a number of professional and personal crosscurrents and headwinds in considering U.S. Bankruptcy Judge Steven Rhodes’s surprising proposal that he be named the judicial mediator of the Detroit bankruptcy case.
Yet, Rosen eventually agreed to join Judge Rhodes in the “bullseye,” playing a pivotal role in the successful resolution of the bankruptcy case, serving as the primary architect of the “Grand Bargain,” a brainstorm that helped rescue Detroit from financial ruin while also saving the Detroit Institute of Arts (DIA). For his efforts, Rosen has received universal praise, a true testament to his skills as the bankruptcy’s chief mediator.
The decision by Rosen to become a “player” instead of a mere “interested observer” in Detroit’s bankruptcy proceedings is among the many back-stories he tells in the book he has written about the case.
While the book – aptly titled, “Grand Bargain: The Inside Story of Detroit’s Dramatic Journey from Bankruptcy to Rebirth” – was not the first to be written on the largest municipal bankruptcy case in the nation’s history, it offers keen insight and special bang for the publishing buck.
The idea of a “Grand Bargain” began at dawn one day with a doodle by Rosen conceptualizing the leveraging of the city’s only real asset – the DIA – to raise enough money to reduce the city’s $3.5 billion pension debt. Ultimately, the Grand Bargain doodle became a reality, as the concept led to a combined total of $820 million in contributions from the state, various philanthropic organizations, and the DIA itself. The money was used to buy a 10-year pension holiday for the city, thus freeing up other revenues to pay a host of other bankruptcy creditors, according to Rosen.
Fittingly, the doodle now hangs in the DIA, where it will be forever revered as a true work of art.
The book, said Rosen in the introduction to his 356-page work, was written with a desire to “recognize and celebrate the heroes and heroines of the Detroit bankruptcy.” His motivation also was driven by a goal to tell a real-life story about the value of teamwork in troubled times.
“In a time of intense political polarization, partisan dysfunction, and civic irresponsibility, I have written this book to tell the inspiring story of people from all points of the political, demographic, geographic, and cultural compass who came together, many at great risk and sacrifice, to find common ground to save a great city,” Rosen wrote.
“This book is not so much a story about the tick-tock of the bankruptcy case itself as it is about the collective heart of the small group of extraordinary people at the center of the vortex,” he related. “This is the story of those people and the events that consumed them. I hope this story will resonate in every corner of our country where faith in democratic government and civil discourse is flickering.”
Rosen, who has lived at various times in Detroit and once was a legislative aide to U.S. Senator Robert Griffin (R-Michigan), earned his law degree from George Washington University and was a partner with Miller Canfield in Detroit before being appointed to the federal bench in 1989. An All-State tennis player in high school, Rosen has worked most of his professional life in a three-block area of downtown Detroit.
“I had wonderful memories of going downtown for the Thanksgiving parade, shopping with my mother at Hudson’s department store, school visits to the DIA, trips to the old Vernor’s Ginger Ale plant, visits to Palmer Park with my father on Sunday mornings to feed the ducks and later to play tennis,” he fondly recounted.
With a lifelong love of sports, Rosen also had “dozens of memories of the sights, sounds, and smells of old Briggs/Tiger Stadium, of Thanksgiving Day Lions football games, and especially baseball games with my dad, a former minor league player.”
In all respects, Rosen qualifies as a “Detroiter,” a term that he wears as a badge of honor in his place as an author of the city’s journey from “Bankruptcy to Rebirth.”
The bankruptcy case took 16 months to run its course, which is “warp speed in the municipal bankruptcy world,” Rosen indicated. During that time, Rosen was among those who lived it virtually 24/7, wrestling with a series of thorny questions and competing interests that could have derailed progress at any point.
Adding to the challenge was the almost daily sight of angry protesters parading around the entrance to the federal courthouse on Lafayette Boulevard, carrying signs such as “Cancel Detroit’s debt: The banks owe us!” and shouting such comments as “Whose money? Our money!” and “Whose pensions? Our pensions!”
Just days before reaching a decision to serve as the chief mediator, Rosen got a taste of just how difficult an assignment it would be when he drove up to the federal courthouse for work and saw a “horde of media trucks covering a large group of union and retiree protesters marching around the front” of the building.
“The large majority of the protesters were African American, and I was reminded once again of the racial undercurrents beneath the legal and financial issues in the bankruptcy and the possibility of it
creating even deeper schisms in our community,” Rosen wrote in Chapter 3 of the book. “The angry protests also reminded me just how deep the passions and resentments were that underlay the issues in the bankruptcy and of the fact that the different creditor groups would be heatedly fighting not only the city but also each other over the city’s meager assets.”
In writing the book, Rosen chronicled “how a committed group banded together against the odds to bring one of America’s greatest cities back from the brink,” said Darren Walker, the president of the Ford Foundation, one of the many philanthropic organizations that donated millions to make the Grand Bargain a reality. “This isn’t just a story about a deal being made; it’s an inspiring example of people mobilizing to act on behalf of a city and its people.”
Walker is among the luminaries who have offered praise for Rosen’s book, writing glowing testimonials that are emblazoned on the jacket cover. They include: former Michigan Governor Rick Snyder; Detroit Mayor Mike Duggan; Dan Gilbert, chairman of Rocket Companies; Rip Rapson, president and CEO of the Kresge Foundation; Nolan Finley, editorial page editor of The Detroit News; and Kevyn Orr, partner-in-charge of the U.S. offices of Jones Day and the former emergency manager for the City of Detroit.
A touch of special praise also was offered by Bill Liebold, who served as chief of staff for Michigan Governor James Blanchard.
“He said if there was a Pulitzer Prize for chapter titles, the book would win it,” Rosen said proudly, referring to such gems as “The Haircut at the Haircut,” “A Lube Job and an Oil Change,” “The Christmas Eve Massacre,” and “‘That Was the Most Expensive Breakfast in History!’”
Judge Rhodes, who retired from the bench in 2015, wrote the foreword to the book, distilling in understandable and blunt terms how Detroit got into such a financial mess.
“For years, the governments of the city of Detroit and the state of Michigan failed in their responsibility to the people of Detroit to secure their inalienable rights,” Rhodes said. “That failure had to be reversed. A path to achieve that new direction had to be created, and it had to be created in this bankruptcy case.”
Rhodes singled out three groups for special praise in the successful resolution of the bankruptcy case. Heading the list was the city’s pensioners, “whose votes in support of the Plan of Adjustment that cut their pensions were immeasurably hard votes to cast,” Rhodes said.
He also saluted all of the attorneys representing the various parties involved in the case, noting that “they proved that zealous advocacy can exist in the same courtroom . . . as professionalism and civility.”
In particular, Rhodes lauded attorney Kevyn Orr, who had an especially unenviable task.
“Among the professionals, Kevyn had the single most challenging job – to simultaneously manage both the city’s government and its prosecution of the bankruptcy case, all while many people let him know that they did not approve of what he was doing.
“Equally deserving of high praise and recognition here is Judge Rosen himself, along with his team of mediators,” Rhodes wrote. “My decision to appoint him as the mediator was the smartest decision I made in the case. He was committed, relentless, creative, smart, and politically savvy. And he loves Detroit. He and his team worked miracles in pursuing and achieving settlements with one group of creditors after another until all of the creditor groups had settled with the city.”
In closing, Rhodes said the book is a must-read for one sector of society especially.
Politicians.
“We elect them and charge them with the responsibility to break through their long-standing and entrenched conflicts and come together to find and execute workable solutions to the problems we face,” he said. “They need to study this book, for chapter after chapter of it lays out for them an effective road map for bringing people together to resolve conflicts and to solve problems, all for the common good and to make our lives better. And this book also lays out for them proof that this road map can work.”
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