< The 2014 Pension 40: The Battle Is On
23
Christopher Klein
Chief Judge
U.S. Bankruptcy Court for the Eastern District of California
Last year: 24
Few judges possess the power of bankruptcy judges. And few bankruptcy judges have the power of those who preside over municipalities that have staggered into Chapter 9, where precedents are scarce. For the past few years, Christopher Klein, 68, chief judge of the U.S. Bankruptcy Court for the Eastern District of California, has overseen the insolvency of the city of Stockton, which expected to continue to pay its biggest creditor, the California Public Employees’ Retirement System, $30 million a year to provide public workers’ retirement benefits. Klein wasn’t so sure that was necessary. In late September he defied CalPERS, which threatened to impose a lien of $1.6 billion on Stockton if the city bailed out of the system. “The bankruptcy code provides that the lien can be avoided and be treated as an unsecured claim,” said Klein, who has an MBA and a JD from the University of Chicago. The judge noted that the city could legally stiff CalPERS or even eliminate pensions entirely. His ruling sent a shock through the nation’s largest defined benefit pension plan (whose CIO, Ted Eliopoulos, is No. 11 on the Pension 40). A month later, however, Klein approved the Stockton reorganization plan, which traded severe bondholder haircuts — including cuts to Franklin Templeton, which had brought the dispute to Klein in the first place — for continued annual payments to CalPERS, some 20 percent of the municipal budget. “It would be no simple test to go back and redo the pensions,” Klein admitted. But his message had been sent: Pensions are on the table.
The 2014 Pension 40
| 1 | 2 | 3 | 4 | 5 |
| Bruce Rauner Illinois | John and Laura Arnold Laura and John Arnold Foundation | Randi Weingarten American Federation of Teachers | Rahm Emanuel Chicago | David Boies Boies, Schiller & Flexner |
| 6 | 7 | 8 | 9 | 10 |
| Randy DeFrehn National Coordinating Committee for Multiemployer Plans | Damon Silvers AFL-CIO | Laurence Fink BlackRock | Chris Christie New Jersey | Robin Diamonte United Technologies Corp. |
| 11 | 12 | 13 | 14 | 15 |
| Ted Eliopoulos California Public Employees’ Retirement System | John Kline Minnesota | J. Mark Iwry U.S. Treasury Department | Gina Raimondo Rhode Island | Phyllis Borzi U.S. Labor Department |
| 16 | 17 | 18 | 19 | 20 |
| Orrin Hatch Utah | Abigail Johnson Fidelity Investments | Ted Wheeler Oregon | Caitlin Long Morgan Stanley | James Hoffa International Brotherhood of Teamsters |
| 21 | 22 | 23 | 24 | 25 |
| Amy Kessler Prudential Financial | Alejandro García Padilla Puerto Rico | Christopher Klein U.S. Bankruptcy Court for the Eastern District of Caifornia | Steven Rhodes Bankruptcy Court for the Eastern District of Michigan | Kevin de León California |
| 26 | 27 | 28 | 29 | 30 |
| David Draine Pew Charitable Trusts | Jordan Marks National Public Pension Coalition | Sam Liccardo California | Joshua Rauh Stanford Graduate School of Business | Karen Ferguson and Karen Friedman Pension Rights Center |
| 31 | 32 | 33 | 34 | 35 |
| Timothy Blake Moody’s Investors Service | Kathleen Kennedy Townsend Center for Retirement Initiatives, Georgetown University | Edward (Ted) Siedle Benchmark Financial Services | Daniel Loeb Third Point | Judy Mares Employee Benefits Security Administration, U.S. Labor Department |
| 36 | 37 | 38 | 39 | 40 |
| Andrew Biggs American Enterprise Institute | Andy Stern Columbia University | Kenneth Mehlman KKR & Co. | Teresa Ghilarducci New School for Social Research | A. Melissa Moye U.S. Treasury Department |
