$500K gift closes firm’s Chap. 9 role
A global law firm that billed Detroit taxpayers millions for representing retirees in the city’s bankruptcy case is donating $500,000 to the fire department for the purchase of hoses, winter coats and gloves and other essential gear for first responders.
The Dentons law firm announced the parting gift to Mayor Mike Duggan on Monday, the deadline for law firms and consultants that worked on the city’s bankruptcy case to submit their final bills to the city.
The law firm said its donation will be used to buy 260 pieces of fire hose, 1,000 radio batteries, electronic notepads, self-contained breathing masks and replacements for other aging equipment at the Detroit Fire Department.
Dentons attorneys represented the nine-member Office Committee of Retirees from August 2013 through the city’s exit from Chapter 9 bankruptcy on Dec. 10. As of Oct. 24, the law firm had billed Detroit $15 million for its services. The final bills are not expected to be made public until next week.
The committee largely focused its efforts on fighting cuts in retiree health care benefits, which Detroit greatly reduced by slashing a $4.3 billion liability and agreeing to pay $450 million to two new health trust funds for retirees.
“Working with the committee has strengthened our belief in the future of this great city and wish to help revitalize and sustain the community where the city’s retired working men and women worked and many still live,” Dentons U.S. CEO Peter Wolfson said in a statement.
Jeffrey Pegg, president of the Detroit Fire Fighters Association labor union, said Monday the donation was misplaced. It should have gone, he said, to the health care trust fund it helped set up for police and firefighters to ensure there’s enough money left for future retirees to get insurance coverage.
“If they want to help out this department, the best way they can is to help out the future retirees,” Pegg told The Detroit News. “That’s where I think the money could best be used.”
Throughout Detroit’s bankruptcy former Emergency Manager Kevyn Orr and his consultants highlighted the plight of firefighters forced to make do with leaky tanker trunks, broken down fire engines and other technological deficiencies as a result of the city’s financial problems.
In September, during a trial over Detroit’s debt-cutting plan, restructuring consultant Charles Moore recounted how firefighters at one fire house put an empty pop can beneath a printer and listened for the sound of it being knocked over as an alert mechanism for emergencies.
The head of Detroit’s beleaguered fire department welcomed the gift.
“This is terrific news,” Fire Commissioner Edsel Jenkins said in a statement. “I know that the brave men and women of the Detroit Fire Department will put this life-saving equipment to good use.”
But Pegg questioned the need for some of the equipment, while also conceding “we’ve always had bad equipment in our shop.”
“The department doesn’t supply us with winter coats,” Pegg said. “I don’t think we need fire hose.”
This isn’t the first time a private business has helped out the Motor City’s first responders with equipment needs.
In March 2013, four months before Detroit declared bankruptcy, the Penske Corp. and other corporate donors bought the city 100 new police cruisers and 23 EMS units worth $8 million to help reduce long response times for emergencies and crimes in progress.
“We hope this donation will be but one part of what many will need to do to help Detroit in very practical ways as the city moves forward,” Wolfson said.
Dentons is an international law firm with 2,600 lawyers across the globe. Its Detroit bankruptcy team was led by Sam Alberts in the firm’s Washington, D.C., office and Carole Neville and Claude Montgomery in Dentons’ New York City office.
In addition to legal fees from Dentons attorneys, the retiree committee also had racked up another $5 million in fees from financial consultants that examined and helped negotiate the terms of Detroit’s pension cuts.