Gerald Rosen: Architect of the ‘grand bargain’
U.S. District Court Chief Judge Gerald E. Rosen — who led the mediation team that helped Detroit exit its record-setting municipal bankruptcy in just 18 months — helped conceive the idea while doodling on a legal pad.
Rosen’s doodle sketch soon after Detroit filed for bankruptcy in July 2013 laid the groundwork for creating a fund to shore up city pensions and protect Detroit Institute of Arts artwork from sale during the bankruptcy. After months of difficult negotiations between lawyers for Detroit, the city’s creditors, unions, pension recipients and the state, a deal was reached for a $816 million fund that included contributions from state taxpayers, private foundations and DIA donors.
His son helped prod him to accept the mediator job when he asked about one of Rosen’s heroes, Winston Churchill, and whether Churchill would have taken the job.
Rosen, a former congressional aide who mounted an unsuccessful run for Congress in 1982, became a senior partner at the law firm Miller, Canfield, Paddock and Stone. He was nominated to the federal bench in November 1989 by President George H.W. Bush and joined the court in March 1990.
In 25 years on the bench, Rosen called the Detroit bankruptcy mediation “the most challenging and personally gratifying because of Detroit. I’m a native Detroiter. I love the city. I’m a product of the city. In many ways everything that I’ve done, everything that I’ve been in my life, I feel I owe to the city and the people here.”
Rosen said the mediation was a “major factor” to getting the sides to agree and reach a speedy exit, and to “find alternatives to the assets in the bankruptcy, which were very few.”
The lessons to other cities facing financial struggles are many, Rosen said: be candid, cooperate, look for creative solutions, step up and remember that things only get worse over time, giving everyone an incentive to settle sooner rather than later.
Kevyn Orr, who served as Detroit’s emergency manager, gave Rosen much of the credit for the quick exit.
“Judge Rosen’s steady leadership and practical judgment allowed the city and its creditors to achieve the impossible: they forged a consensual, comprehensive plan of adjustment in less than two years,” Orr said.
Detroit shed $7.3 billion of its $18 billion in debt, restructured $3.1 billion, reached five-year labor agreements with all its unions, and developed and implemented a multi-year $1.7 billion revitalization plan for city services and operations.
Rosen created the deal that “streamlined key city operations, helped improve public safety, preserved the city’s world-class art museum in a perpetual public trust, and avoided drastic cuts to pension and related retiree benefits,” Orr said. “It is no exaggeration to say that Judge Rosen was indispensable.”
Rosen has a couple more months to serve as chief judge. He spent a significant amount of time working to get funding for a major renovation project for the Theodore Levin U.S. Courthouse in downtown Detroit. The project will include a new atrium and access to an outdoor courtyard.
Rosen could opt to retire from the bench completely in October 2016, but he hasn’t made a final decision. Rosen teaches law school classes and regularly updates a law school textbook he wrote, and he’s currently writing a book on the Detroit bankruptcy.
“I want to tell the story of these folks,” he said. “...It’s a book about the heroes and heroines who came together against all odds to pull off what Judge (Steven) Rhodes called in his confirmation of the plan of adjustment a miracle.”
Occupation: Chief Judge, U.S. District Court for the Eastern District of Michigan
Education: Bachelor’s degree, Kalamazoo College; Juris Doctorate, George Washington University Law School
Family: Wife, Laurie; one son
Honored for: For leading the mediation in Detroit’s Chapter 9 bankruptcy restructuring and helping Detroit exit in less than 18 months