ICYMI: Fifth Circuit Court of Appeals Reverses Singing River Pension Settlement

The part the appellate panel at the 5th Circuit didn’t like involved how the attorney fees were paid out in relation to the financial risk assumed by the Singing River Pension retirees among other things. It goes back to Judge Guirola’s Courtroom per below:

Click to obtain full 29 page decision
Click to obtain full 29 page decision

TransportRoom Continue reading “ICYMI: Fifth Circuit Court of Appeals Reverses Singing River Pension Settlement”

Fanfare for the common man: The only people getting 100% on the dollar in the Singing River Pension Debacle are the Lawyers

This is one of those circumstances where it is again good to have a variety of viewpoints on a news item because one could watch the Tee Vee news here on the Coast1 and come away thinking the Singing River Retirees have been made 100% whole but unfortunately this is wishful thinking. Shearing the flock has to be done in stages and now the stage shifts from the Federal Courthouse in Gulfport back to Chancery Court in Jackson County where the actual haircuts will occur.

The certainty in that statement lies in the dollars and cents currently in the plan’s trust account and the fact that the early payment schedule provided for in the settlement does not provide much immediate help to improve the overall financial condition of the trust. The only immediate benefit is non-monetary benefit in the finality and closure provided by the settlement itself.

From a larger standpoint and viewed through the lens of time the Singing River Pension Debacle is just the latest in a long line ‘incidents’ where the ordinary people in the community get sheared for the benefit of portions of the Jackson County political oligarchy.  Slabbed has documented several of these incidents including one of the most recent on these pages.  The financial results of these ‘incidents’ are on display for everyone around Jackson County to see at locales such as 435 East Beach in Ocean Springs.  For the folks in Jackson County, the regularity of these ‘incidents’ paid for by the public, or in this instance by both the public and the Singing River Retirees, represent the worse kind of tax imaginable because it is a hidden tax paid to the benefit of the few.

In the case of the Singing River Health System, the most galling aspect of this whole saga for the retirees is that a large portion of the very people that brought the County and the SRHS retirees this pension disaster remain firmly attached to the Health System, ostensibly skipping away as if nothing happened.  For the new SRHS trustees, I frankly can’t fathom on what basis they have to actually trust the advice they are being given to support their decision making. You gotta think based on what has occurred that in the next disaster they’ll be tossed aside as easily as their predecessors. Continue reading “Fanfare for the common man: The only people getting 100% on the dollar in the Singing River Pension Debacle are the Lawyers”

What we have here is an ol’ fashioned bar fight

And it’s the bar down here on the coast that is having the bare knuckle brawl folks and the shame of it is I haven’t had a chance to add some much needed commentary but that changes with this post, which I’ll update as I gain time through the day. The short story is this. In one corner there is what I’ll term “the settlement retirees”, their counsel along with the Jackson County political establishment (most of it anyway). In the other corner are the “we want to be made completely whole retirees” and their counsel. The money stakes here are huge which is why the fight is turning very nasty, again exposing some old rivalries that I first noticed back during the Scruggs prosecution.

For me the question is settling now a better deal than fleshing things out via litigation. I did notice that a concern raised here about the handling of attorney fees was addressed.

First things first, someone sent me “retirees that want to be made whole” attorney Harvey Barton’s 2009 judgment via anonymous email a while back and I can’t find it in my extensive email archive.  Nevertheless someone took the time to mail me a hard copy and I agree the time is right to explore the judgment and more importantly the legal concepts behind what Judge Persons found.

I’ve also seen and will post the second recusal motion of Special Judge Hilburn as it exposes some of the fault lines running under the Bar in greater detail.

Before I do any of that its worth pointing out that Slabbed began covering the Singing River Pension Meltdown because it was the exact type of story to which we were tailor made to cover and not because of the gruesome car crash quality to it all but because Slabbed could help get information out to help the retirees make informed decisions.  We’ve reached the inflection point. Updates will be posted beginning with the flying muck below the jump as time allows.

Update #1: Continue reading “What we have here is an ol’ fashioned bar fight”

Bad settlement first and Justice later?

I guess the root of my heartburn comes from the retirees ostensibly paying for all the legal fees in a breach of fiduciary duty case and folks, it was not the Singing River Retirees that did the breaching. The folks at SRHS Watch have some heartburn too:

Opinion: Reeves on the Hunt for Pension Plan’s “Real Killers” ~ SRHS Watch

Keep an eye peeled because they have some good stuff coming:

Forthcoming on SRHS Watch: Certus Labs, Ethics Laws

Let’s analyze the proposed SRHS settlement: The Trustee

Do we have a true settlement or a glorified cramdown on the SRHS pension crisis? Before I get to a few numbers and highlight the court case that I think ultimately controls the proper resolution of this disaster, we need to take a look at the person that Special Master Britt Singletary tasked about a month ago with overseeing the pension plan go forward, former Department of Public Safety Director Steve Simpson.

After nearly a year long fight to get the pension benefits they were promised, Tuesday a judge told Singing River Health System retirees they should sleep restfully from now on. Special Master Britt Singletary appointed an independent trustee, former Circuit Court Judge Steve Simpson, to oversee the pension. And he said an announcement of a settlement deal between the health system and retirees is close at hand.

“What we believe was the root of a lot of the problem was there was nobody on behalf of the pension holders or the pension members to look out for their interest alone,” said Jim Reeves, who represents some of the retirees. “Now we have that person in place who is a watchdog, so to speak, for the pension holders.”

April Havens gave us even more background on Simpson:

Simpson, a Gulfport attorney who focuses on civil litigation, defense, governmental affairs and lobbying, premises liability defense, personal injury defense and criminal defense, is also a former Mississippi Public Safety Commission member.

The decision to put Simpson at the helm of the pension plan was made Tuesday during a hearing before Special Master Britt Singletary in Pascagoula.

“Singing River Health System and certain plaintiff’s attorneys have agreed to an order governing the administration of the retirement plan and trust,” SRHS attorney Brett Williams said.

Between the two accounts, anyone that did not previously know Mr. Simpson now understand that his background is impressive:

  • A lawyer that “focuses on civil litigation, defense, governmental affairs and lobbying, premises liability defense, personal injury defense and criminal defense”
  • Appointed by former Governor Haley Barbour as head of the Mississippi Department of Public Safety
  • A former Harrison County Circuit Court Judge

I am just guessing but to the extent litigation and in particular agreed orders inherently involves a negotiating process there is a good chance Mr. Simpson was a compromise choice. The public may never know the answer to the how the parties settled on Simpson but to me the real question is whether or not he is qualified to be a pension trustee. My personal opinion is not and by implication I think it is more likely than not that once again the cost of the bad decision making will be borne down the line by the SRHS pension plan participants.

It would not be fair for me to leave it at that but before I lay out why I think Mr. Simpson is not the right choice, what do the folks over at SRHS Watch think? That interactive website is heavily trafficked by retirees so the commentary is going to reflect some of what the group as a whole is thinking. The analysis is brutal but I think it is also reflective of a growing frustration among the retirees that has reached the boiling point: Continue reading “Let’s analyze the proposed SRHS settlement: The Trustee”

Former SRHS CEO Chris Anderson is a CPA/CEO so let’s try to think like one

Since transparency is still sorely lacking over at Singing River Health and because I rolled out my working theory why the events surrounding this man made financial disaster have unfolded in a certain way we have to take a step back and look at the big picture. And to do that we must think like former CEO Chris Anderson, the man with all the answers.

To understand how the disaster unfolded most good Certified Fraud Examiners will tell you to “think dirty” and what it meant by that term is that the “frauditor” must 1. Understand how the perpetrator thinks by attempting to walk the proverbial mile in the perp’s moccasins which leads to 2. Gaining a possible understanding the motivations which lead to the disaster. This specialty is essentially the intersection of the social sciences with the accounting and finance that was originally pioneered by legendary sociologist/criminologist Donald Cressey, a name that has been mentioned a few times previously on this website.

First up are a few requisite disclosures. Dating back to November of last year I’ve had the pleasure of meeting many fine folks from over in Jackson County with connections to either the hospital system or County Government and the resultant communications with this group have a painted a picture of CEO Anderson that I thought was rich in its depth and color that also came with some analysis that is out of this world in my opinion.  Important to note is that the totality of what I’ve been told by multiple parties (many with but some without a dog in the hunt) about Anderson is actually fair to the man, who has been the villain of choice for the media covering this disaster, Slabbed included.

The most frequent adjective mentioned to me concerning Anderson is Continue reading “Former SRHS CEO Chris Anderson is a CPA/CEO so let’s try to think like one”

FUBAR: A Jackson County Political Tradition

More than anything else the events of this week revealed exactly why the Jackson County Board of Supervisors hired Billy Guice. Campaign season can no longer be put on hold for incumbent Supervisors, who hired Guice to run interference for them, ultimately using Guice to throw their own political appointees under the bus in one last effort to save their jobs. The cost to the taxpayers for this political expenditure is $345,000 and counting. I’m fairly certain the retirees that are fixing to get screwed are not very happy with Guice’s recounting of the obvious for the Sups, which has been covered in detail on both these pages as well as the Sun Herald for the past 7 plus months.

Let’s start with the Sun Herald, which was excluded from Bronco Billy Guice’s Wild West Show, a fact they were clearly unhappy about:

Jackson County has spent $345,000 on SRHS probe ~ Anita Lee

Jackson County taxpayers should have saved their money ~ Sun Herald Editorial Board

A short snippet is in order but the entire Op-Ed is fine reading:

Looks as though the Jackson County Board of Supervisors brokered a deal for the taxpayers to buy a wheelbarrow full of fool’s gold for the low, low price of $345,000.

A subscription to the Sun Herald would have saved the taxpayers a ton of money — we don’t see anything in the report about the investigation into the Singing River Health System pension fund that hasn’t been covered in the paper.

Even better Jackson County taxpayers could have saved the S/H subscription and read up on things right here on Slabbed. 😉

Moving right along WLOX got in on the show with the following report which uncritically parrots Guice’s press release that ran in the Mississippi Press, which coincidentally is also a public relations prelude to screwing the SRHS retirees in my opinion:

Attorney Billy Guice gets on bad side of both SRHS executives and retirees ~ Mike Lacy

Poor Billy Guice had no clue he needed firefighting training before taking on this $345,000 no-bid CONsulting job with Jackson County as we turn our attention next to the Jackson County press release disguised as a trio of new reports which ran yesterday in Pravda, err, I mean the Mississippi Alabama Press: Continue reading “FUBAR: A Jackson County Political Tradition”

A few keys to understanding Singing River Hospital disaster: Part 1

I’ve followed the unfolding Singing River Hospital financial disaster from afar and thus far have managed to not look at a single audit or financial report as I’m currently neck deep in paying work.  That said I have seen woeful misinformation spread about Defined Benefit Pension Plans during the course of the reporting.   Defined Benfit plans, if properly run, can still be an excellent and cost effective employee benefit and it is there we begin because many have been looted out and then dumped on the taxpayers:

Looting the Pension Funds ~ Matt Taibbi

‘Retirement Heist’: How Firms Trimmed Pensions ~ Interview with former WSJ Reporter Ellen Schultz, WTEST

At Singing River Hospital, the pension fund was not looted. Instead it was simply not funded by the hospital to the point now where management now claims that the plan is actuarially unsound. The implications of not funding a qualified defined benefit plan, which likely had mandated minimum funding requirements, are legion.

For instance, when most people think of qualified pension plans they think IRS, because it is the IRS that writes the regulations for plan qualification and actually approves the plans both when they are established and terminated. However it is not the IRS that Singing River Hospital needs to worry about in this instance as it is the Department of Labor, specifically the Employee Benefits Security Administration that would handle the potential ERISA violations associated with the media disclosures involving the Singing River defined benefit plan and that is the bad news because while the IRS “audits”, the DOL “Investigates”.  Having handled a DOL Investigation once or twice in my time practicing public accounting, I can say first hand it is far better to have the IRS show up than the DOL when it comes to this subject matter.

All that said the Singing River financial debacle could keep an enterprising business writer busy for weeks as the ramifications of seeing yet another defined benefit pension plan crash and burn are literally legion.  Here are a few things that come to mind: Continue reading “A few keys to understanding Singing River Hospital disaster: Part 1”