Originally Posted by DanaT
Contracts are broken and modified all the time without bankruptcy.
Let me give you common examples. Repossession of cars.Written into the contract. Backed up by case law. Foreclosure on property.Written into the contract. Backed up by case law. Evictions due to non-payment of rent.Written into the contract. Backed up by case law. Airline tickets (i.e. you had a contract to get you from point a to point b in a certain class of service on a certain day at a certain time..yet that contract is often broken).Read the fine print on those tickets. There is no guarantee. In fact it is generally written explicitly there is no guarantees.
Many many contracts are broken or modified without bankruptcy. In fact, most times parties prefer this because there are more losers in bankruptcy.I would actually prefer bankruptcy in my department because a lot of the deadwood waiting to retire would go and the books would be opened up. We would get to see all the deals done going back serveal years.
I have yet to see a case where someone who didnt enter into the contract has to pay bills for the contract in bankruptcy.
In general if state X doesn't have the money to pay their pension obligations ONLY state X should be required to make it right. There was no representation with the contract from the other 49 states. If the other 49 states were not involved in making the contract, no way on gods green earth should the be liable for payment.No disagreement with you there. CalPERS is doing fine by the way. It is cities and counties spending money on silly things. See San Berdo, Stockton, and OC.
This is like me making a deal on a shiny nee ferrari and then not being able to pay for it. The deal was bewteen the ferrari dealer, the bank, and myself. What does the contract say when you buy a car? But, when when I file bankruptcy, the bank wants their money so they get the court to say CACop and BruceV are responsible for the money owed on the ferrari but I get to keep the ferrari.
My contract with the city said up until last year that I would pay 9% of my pay to CalPERS and the city would pick up any other contributions. For much of the 90s and 2000s the city paid between 0 and 9 percent. Most of the time it was 4-5%. My city could have been smart like Morgan Hill where they banked the amount less than 9%. They chose not to. Now they negotiated a contract where I pay 20%.
No where in the current contract or the other ones was a provision for them to stop paying. CalPERS would not allow it. CalPERS is essentially a bank giving a loan to cities and counties and the state to purchase retirements. They are not going to have it written into the contract where the employer or the employee can stop paying on the pension.
In the 1940s some sicites and counties tried to not pay pensions. The courts ruled it was amatter of contract law. They must pay. The only way out was bankruptcy. Since bankruptcy means opening up the books the cities and counties paid without bankruptcy.
Like I said above in red I would be okay with the city going bankrupt because the courts have the wisdom to see bull****, unlike you.