– Photo by Robert Chase
By Tom Kirvan
Legal News
He was more than just a casual observer when “Detroit’s decades-long slide toward oblivion crash-landed in bankruptcy vourt on July 18, 2013 precisely at 4:06 p.m., spewing in its wreckage its retirees, employees, bond-holders, vendors and creditors of every type — more than 150,000 in all.”
In fact, he was the ultimate insider, a longtime federal jurist and the chief judge of the eighth largest U.S. District Court in the nation with headquarters located blocks from the heart of Detroit’s downtown.
Chief Judge Gerald Rosen, of course, eventually would play 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) and dramatically reducing cuts to retiree pensions.
For his efforts, Rosen has received universal praise, a true testament to his skill as the bankruptcy’s chief mediator, an appointment he might have declined if not for a few words from his teen-age son.
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 that will be told in a book he is writing on the case. While the book is not destined to be the first written on the largest municipal bankruptcy case in the nation’s history, it figures to offer special insight and more bang for the publishing buck.
Coincidentally, the working title of the introduction to the book is “Detroit’s Big Bang Theory” — a catchy phrase that is certain to draw in readers from a legal background and beyond.
The book, Rosen writes in the first draft of the introduction, “is not so much a story about the tick-tock of the bankruptcy case itself as it is about the collective heart of the people who made this all possible in less than 16 months — warp speed in the municipal bankruptcy world.”
The book, which is almost half written and may spawn a movie as well, will accentuate the positive, he notes in the introduction.
“There are many heroes and heroines in this story – but there are no villains,” Rosen writes. “Although there was certainly intense conflict, tension, deep antagonisms and misjudgments, this is instead the story of the dozens of enormously bright, talented, creative, courageous, and incredibly dedicated men and women ...”
In short, he says, “this is the story of Detroit’s own Big Bang Theory of unrelated people and events colliding together by chance in the same time and space to create a universe of new hope and opportunity for a great city and its people.
“By a quirk of fate,” Rosen says, “I was privileged to be with this small group of extraordinary people at the center of the vortex of this Big Bang.”
The book, he concludes in the first draft of the introduction, is the “story of those people and the events that consumed them.”
Among them, of course, is the judge himself, who first had to wrestle with the thorny question of whether he should accept the chief mediator role in the case.
While it was an “incredible honor to be considered” for the position, Rosen admits, it was “no slam dunk” that he would accept it. There were, he says, a “number of issues to consider” and “several serious potential roadblocks” to accepting the appointment.
“There were clearly no ethical barriers to my serving as the judicial mediator, but a related issue was not so clear: whether judges who served as mediators had judicial immunity from suit,” Rosen writes in Chapter 6 of his book.
It was a matter that Rosen — or any other mediator — “was not comfortable leaving to chance.”
U.S. Bankruptcy Judge Steven Rhodes understood as much, within days issuing an administrative order “providing mediators with immunity from suit”
in the Detroit case.
Next, Rosen wanted to gauge the feelings of his colleagues on the federal bench, which he did during a special meeting. It offered an opportunity for them to have “as the diplomats say, a ‘full and frank and candid’ discussion of all of the pros and cons,” Rosen says.
At the urging of his colleagues, Rosen consulted “several of my closest counterparts” from other U.S. District Courts around the country.
He spoke with Loretta Preska, the chief judge of the Southern District of New York; James Holderman, chief judge of the U.S. District Court in Chicago;
and Roslyn Silver, chief judge of the U.S. District Court in Arizona.
Each encouraged Rosen to “just do it,” with Preska adding a presidential twist in the form of an ode to Harry Truman — “Give ‘em hell, Jerry!”
Still, Rosen was leery that “there was an all too real possibility that the case and the mediation process would degenerate into a very ugly free-for-all that had the potential to stain everyone involved with it, including our court because of my potential role as chief mediator.”
Reinforcing concerns was the almost daily sight of angry protesters parading around the entrance to the federal courthouse on Lafayette, 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!”
With that backdrop, Rosen admits to more than a few sleepless nights as he grappled with his decision.
“In the midst of all this external and internal turmoil, my 15-year-old son Jake provided clarity by introducing an element I hadn’t thought of — Winston Churchill,” Rosen writes in the chapter.
Rosen, long a student of history, had read widely about the legendary British statesman and had become a “Churchillian,” admiring the “courage” and “brilliant leadership qualities” that the longtime Prime Minister displayed in the face of the Nazi menace during World War II.
“Everyone looks for heroes in history and, although I recognized his equally larger-than-life flaws and failings, Winston Churchill was mine,” Rosen writes.
U.S. Bankruptcy Judge Steven Rhodes, while clearly understanding the multitude of concerns facing Rosen, also needed a decision on the mediator appointment ASAP.
It was a deadline that was looming as Rosen drove home from a Saturday afternoon golf game with his son. Talk of golf soon gave way to more pressing matters.
“So, Dad, are you really thinking of not doing the bankruptcy?” Jake asked his father as they headed home in a multi-hued sunset.
“Well, Jake, as you heard when I was talking with Judge Rhodes, it’s not an easy decision,” Rosen replied. “There are a lot of things I have to be
concerned about, and some of my colleagues don’t think it’s such a good idea for me to do it.”
Jake, in turn, had his own idea, distilling the matter into decidedly understandable terms.
“What do you think Churchill would have done, Dad? Do you think he would have refused? Everyone has a time to stand up. This is your time, Dad.”
For a father looking at a son, it was moment of insight that “hit me like a bolt,” Rosen admits.
“Coming from my son, it was such an overwhelmingly, startling moment of clarity that I had no response except to nod. Jake was so right. The tumblers just fell into place, and unlocked the doors of my confusion and conflict. . . Only time and fortune would tell if this really was my time, but I couldn’t take a pass. Churchill certainly would not have.”
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