* Retiree committee hires Lazard, Segal
* Retirees face possible benefit cuts in bankruptcy case
* Bloom was a top architect of 2009 U.S. auto bailout
* Bloom is also long-term adviser to unions
By Joseph Lichterman
DETROIT, Sept 19 Detroit's retirees have
bolstered their defenses against benefit cuts in the city's
bankruptcy case by hiring Ron Bloom, a chief architect of the
Obama administration's 2009 U.S. auto bailout and long-time
adviser to unions in industry shake-ups.
Lazard Ltd, where Bloom is now vice chairman, said
it will advise a nine-member committee that represents 23,500
public sector retirees facing cuts to their healthcare and
pension benefits after Detroit's Chapter 9 Bankruptcy filing on
Benefits consulting firm The Segal Company was also hired to
assist the committee, two people familiar with the matter said,
declining to be named because the details are confidential.
Detroit is the largest city in U.S. history to seek
bankruptcy protection and its emergency manager, Kevyn Orr, has
said retiree benefits could be cut as the city struggles to pare
down more than $18 billion in debt.
Roughly half of its liabilities stem from retirement
benefits, including $5.7 billion for healthcare and other
obligations, and $3.5 billion involving pensions.
Unions have fought back, arguing that such benefits are
protected by the Michigan and federal constitutions. The retiree
committee has asked the U.S. District Court in Detroit to remove
the case from bankruptcy court and determine the constitutional
Bloom and Orr worked together during the 2009 U.S. auto
crisis that culminated in the government-backed bankruptcy
restructurings of General Motors Co and Chrysler Group
LLC, now a unit of Fiat SpA.
At the time, Orr represented Chrysler and worked at the law
firm Jones Day. He left the firm in March when he was appointed
Segal declined to comment. Orr's spokesman Bill Nowling also
declined to comment.
Bloom resigned from the Obama administration in August 2011.
That year he was hired as a consultant to United States Postal
Service workers, who are facing big cuts under that agency's
plans for restructuring.
Bloom, who began his career with Lazard, assisted unions in
key airline restructurings in the early 1990s.
He was the point man for the United Steelworkers Union
during industry restructuring in the 1990s and early 2000s.
He also advised the steelworkers in 2007 when the union and
the United Auto Workers agreed to the formation of a trust that
would take the burden of paying for retiree healthcare away from
supplier Dana Corp, which was in bankruptcy at the time.