In addition to the cogent reasons against dismissal of the Retirement Fund bankruptcy case that have been given by Brown Rudnick in its filings this weekend (See http://kixproductions.com/cnmiretiree/2012/05/19/nmirfs-reply-to-motions-to-dismiss/?utm_source=rss&utm_medium=rss&utm_campaign=nmirfs-reply-to-motions-to-dismiss), there is at least one more, and that has to do with the impact of the eventual decision by the Hawaii Bankruptcy Court on retirees across the U.S.A.
Millions of retirees on the mainland are facing the same situation as are CNMI's retirees-the possible loss of their pensions because the agencies providing their pensions are also about to go bankrupt. For this reason, the CNMI RF's action has drawn national attention: the CNMI RF is the first to have actually declared bankruptcy in court. The national attention has been and will be embarrassing-having to admit in public that the CNMI wasn't all that prudent in handling its retirement program, that it enacted numerous laws that gave generous retirement benefits to people without making sure there was enough money to pay for them.
Nevertheless, it also puts the CNMI in the position of being the test, or lead, case. What happens here could set the precedent for what happens in all the other places where retirement funds are running out and retirees are threatened with a loss of their pensions. This could put considerable pressure on the court, when it comes to handing down its ruling. Regardless of which way the decision goes, the repercussions are bound to be felt all across the country.
Should the court dismiss the bankruptcy petition, not only would it spell disaster for local retirees, but-assuming similar conditions prevail everywhere else-it would also spell disaster for retirees across the country. It has already been pointed out that the ripple effect would harm the local economy. Imagine the harm to the national economy!
Can the bankruptcy judge consider “the common good” in reaching a decision? Will he think of the precedent he is setting, whichever way he rules? Should the answer be “yes,” that would seem yet another reason to hope that the bankruptcy petition will prevail, and the Retirement Fund will be allowed to survive, to restructure the program benefits, and to continue to serve its members.
Will the CNMI experience another media frenzy as the case comes to court? Will stateside media descend and camp out and scrounge for interviews among the onlookers? If the CNMI plays its cards right-and makes sure those media reps see and experience more of the island than the Horiguchi building in Garapan-it could get a lot of good, free publicity as an attractive tourist site, and maybe even as a good investment site. Might as well make lemonade, right?