Michigan-based Butzel Long law firm seeks assistance with underfunded pension obligations

LANSING, MI — Butzel Long PC has requested that a federal agency salvage its pension plan that’s underfunded by more than $9 million.

The Detroit-based firm says it can no longer afford to pay its pension obligations, which were underfunded by $9.1 million as of October, if it wants to continue paying attorneys competitively.

It asked the Pension Benefit Guaranty Corp. to take over the retirement plan. The PBGC is a federal government agency but does not use general tax revenues. Sponsors of defined-benefit plans pay insurance premiums to be covered by the agency.

Butzel Long has offices in Detroit, Ann Arbor, Bloomfield Hills and Lansing. It also has offices in New York and Washington, D.C., along with alliance offices in China and Mexico. It employs about 250 people, including some 135 lawyers.

The firm covers several areas of law and regularly represent clients before the PBGC. It also represents the Michigan Press Association, of which MLive Media Group is a member.

The pension plan has about 460 members. Its market value was nearly $33.4 million in 2011, according to an Internal Revenue Service filing.

Firm President and managing shareholder Justin Klimko said low interest rates, market conditions and longer life expectancies contributed to the plan’s problems.

The firm froze the benefits for all attorneys in 2004 and for other employees in 2007. Since then, there have been no more benefits accrued or new members added to the plan, he said. Employees are now offered a defined-contribution 401(k) plan.

“The size of the future contributions would affect our ability to pay competitive compensation for our people,” Klimko said. “That’s the name of the game in our business.”

Though some companies that apply for relief through the PBGC are facing bankruptcy, Klimko said that’s not the case for Butzel Long.

The PBGC insures about 990 pension plans sponsored by Michigan companies. In 2011 it paid about $384 million to more than 45,000 Michigan retirees in failed plans, according to its website.

Law practice consultant Edward Poll has chided law firms for not meeting their pension obligations.
“You have to know that at some point, you’re obligated to pay that, and if you don’t have the cash set aside to pay that, you’re going to have a problem. To me that’s just mismanagement,” said Poll, owner of Venice, Calif.-based LawBiz Management Co.

Poll said he knows of only a few law firms that have funded pension plans for their attorneys. He said he understands that external factors contribute to underfunding, but said it’s still "irresponsible" to let a plan get to that point.

Most law firms have 401(k) retirement plans. Pensions are more common in government and collective bargaining shops than they are among private employers.

The state of Michigan has been making changes to public employee pensions. Laws impacting long-term state employees and teachers have ended up in court on constitutionality questions.

Automakers also have struggled with pension obligations. Ford Motor Co.’s plan is underfunded by $18.7 billion, The Detroit News reported on Tuesday.

Email Melissa Anders at manders@mlive.com. Follow her on Twitter: 



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The Stanford International Victims Group Forum

Victims Check your claims!!

I was recently contacted by several victims asking for help regarding their claims with Janvey - or the company that is dealing with the claims (Gilardi) for Janvey.

They informed me that their claims had been overwritten by a law company called Butzel Long. These are victims that had submitted their own claims and they wanted to know who Butzel Long were and why they had registered a claim in their name.

After making contact with Gilardi, I was shocked to find out that my own claim had been hijacked by Butzel Long, and they had submitted claims for hundreds of victims. I explained to them that:

1) I had never heard of Butzel Long.
2) I had already submitted my own claim
3) I did not have a law firm working for me.

The information I was given was that any payment in my name would be paid to Butzel Long and it would be up to me to make contact with them and get the money transferred into my name!!!

I then went onto Google and found out that Butzel Long is a law practice in New York. I made contact with this law firm and spent several hours trying to speak to someone about why they had submitted a claim for me and the other victims that had contacted me. After many phone calls and many hours spent on the phone I had not managed to speak to anyone but the receptionist who said she had no idea who was dealing with this matter, why they had filed a claim in my name and despite repeatedly trying I had only been put through to voice mails, where I left messages. Guess what, no one bothered to phone me back and explain the situation. What I did manage to find out was that a certain Peter Morgenstern is associated with Butzel Long and it would seem that my name -along with several hundred other names - came from Peter Morgenstern.

It has taken me weeks of telephone calls, many emails and threats of legal action to get Gilardi to remove Butzel Long from my claim and make sure that any payment comes to me and not to a third party.

I also made contact with Grant Thornton who informed me that Butzel Long had also filed claims for hundreds of victims, many of whom had already filed their own claims. The difference was that Grant Thornton wrote back and said they would only consider claims from Butzel Long where the claims were accompanied with a signed declaration of consent.

I would advise anyone who has ever made contact with Peter Morgenstern or any other lawyer to check with Gilardi and make sure that they have not hijacked your claim. Remember these lawyers do notwork for free and if they have submitted a claim on your behalf, they will not be doing it for free!!

YOU HAVE BEEN WARNED!!

For a full and open debate on the Stanford Receivership visit:

http://sivg.org.ag/

The Stanford International Victims Group Forum