Wayne Digs Into Pension Deficit
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20150216-NEWS--0001-NAT-CCI-CD_-- 2/13/2015 6:45 PM Page 1 ® www.crainsdetroit.com Vol. 31, No. 7 FEBRUARY 16 – 22, 2015 $2 a copy; $59 a year ©Entire contents copyright 2015 by Crain Communications Inc. All rights reserved Page 3 Wayne digs into pension deficit bility of $850 ten less well-funded than states’, County goals: Cut health care million. this is still a very low funding ra- Low interest tio,” said Amy Resnick, executive rates have played editor of Pensions & Investments, a LOOKING BACK: Black costs, avoid bankruptcy a part, but the sister publication to Crain’s. “It underfunding is would impact the county’s ability Monday killed an IPO, but he BY TOM HENDERSON who became the county’s chief re- also due to a his- to fund other services.” CRAIN’S DETROIT BUSINESS structuring officer in January. tory of generous Saunders said the county plans found profits in Porta Johns matches, “13th According to a report for County to start making up that shortfall Wayne County does not plan to file checks” and gen- Executive Warren Evans by Ernst through savings in health care for Chapter 9 bankruptcy or to is- Saunders erous early re- Snyder’s medical education & Young LLP, the pension system costs it negotiates in upcoming sue bonds to cover a growing short- tirements for limited years worked. has gone from a funding ratio of 95 contract talks with 11 unions. It is cuts startle hospital officials fall in funding for its pension sys- percent in 2004 to a ratio of 44 per- “Even understanding that local tem, according to Tony Saunders, cent today, with an unfunded lia- government pension funds are of- See Pensions, Page 24 College grads in the showroom: Victory Automotive’s pitch MichiganFunders.com Health Care co-founders David New path to invest Tessler (right) and Niles Heron hope to take advantage of new state crowdfunding laws that allow in Mich. small biz entrepreneurs to offer not just investors considered ac- equity stakes. Converging on care: Mental Pair launch equity credited by the Securities and Ex- health services better, but change Commission, will be able to participate. to-do list still long, Page 11 crowdfunding “We’re excited to give people an- other way to invest in their commu- nities,” said co-founder and CEO This Just In platform David Tessler. “We want people to be able to Last call for nominations BY AMY HAIMERL build something right here,” added for Crain’s 20 in their 20s CRAIN’S DETROIT BUSINESS Niles Heron, co-founder and chief business development officer. It’s your last chance to The first equity crowdfunding “There is a diverse support group nominate a 20-something pro- platform designed exclusively for ready to accept those new ideas.” fessional who is making his Michigan small-business owners There are several ways equity or her mark in the region. and investors launched on Sunday. crowdfunding can work (See story, Candidates for Crain’s 20 in Called MichiganFunders.com, Page 21). MichiganFunders’ dis- their 20s recognition program the website takes advantage of tinction is that it allows only are not limited to any particu- new crowdfunding laws signed by Michigan companies and in- lar field or activity but include Gov. Rick Snyder in 2013 that al- vestors to participate. That simpli- up-and-comers who are mak- low entrepreneurs to raise be- fies the legal and regulatory over- ing waves as young profession- tween $50,000 and $2 million from sight because there is no interstate als within a company, have local investors by offering equity commerce. But it’s also just good shown success or originality shares, selling debt or creating a as entrepreneurs, or have revenue-sharing model. Anyone, See Equity, Page 21 made local impacts in some JOHN SOBCZAK other demonstrable way. Besides the corporate world, candidates are consid- ered from creative indus- tries, nonprofits and social Chassix misses 2nd bond payment; creditors concerned entrepreneurship arenas. Winners will be profiled in BY DUSTIN WALSH sis, brake and powertrain components did expires March 4 on $375 million worth of the June 1 edition and hon- AND CHAD HALCOM not make a scheduled payment twice senior secured notes to bondholders. ored at a future awards event. CRAIN’S DETROIT BUSINESS since December on $525 million of bond Chassix and Platinum Equity executives Nominees must be 29 or debt it carries. Chassix, owned by Tom younger before June 1. Nomi- declined to comment. After missing a payment of $17.4 million Gores’ Platinum Equity LLC, is working with nations are due Feb. 20. “This is a delicate situation,” a source to bondholders this month, Chassix Inc. has bondholders during a 30-day grace period To fill out the form, visit who declined to be named told Crain’s. “I asked the bondholders to organize and re- to formulate a restructuring plan by early crainsdetroit.com/nominate. used to hear that Tom Gores took pride in tain advisers — and a creditor’s filing as- March, according to a Debtwire report. Questions? Contact Amy the fact that he does not put companies serts that the company is taking steps to- Haimerl: [email protected] Sources familiar with the situation into bankruptcy; let’s just say I haven’t or (313) 446-0416. ward a possible bankruptcy. told Crain’s that Chassix may file bank- Gores The Southfield-based supplier of chas- ruptcy around the time its grace period See Chassix, Page 23 NEWSPAPER 20150216-NEWS--0002-NAT-CCI-CD_-- 2/13/2015 3:54 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS February 16, 2015 MICHIGAN BRIEFS capital firm started three years ago Shield of Michigan agreed to a new by Rick DeVos to seed startups, has five-year agreement that will pre- Kids of Amway’s other (non-DeVos) founder doing OK, too formed the Phase II fund to provide serve access for Blues members at up to $1.5 million per company, the Kalamazoo-based health care Bringing the American way of selling skin care Steve Van Andel, 59, has been Amway chairman three times the previous amount it organization, MiBiz reported. products and vitamins to China helped make Amway since 1995, while two of his siblings sit on Alticor’s MiBiz Ⅲ Trader Joe’s is coming to the Corp. the world’s largest direct seller. It also made board. David Van Andel, 55, leads the Van Andel Insti- would invest, reported. Run- Grand Rapids suburb of Kent- the children of one its co-founders billionaires. tute in Grand Rapids, started by his parents. It focus- ning the new fund is Mike DeVries, wood, after a lease was signed be- Amway Chairman Steve Van Andel and siblings es on biomedical research and science education. who led the Grand Rapids office of tween the grocery chain and David Van Andel, Barb Van Andel-Gaby and Nan Barb Van Andel-Gaby, 52, has six children, lives the Ann Arbor-based venture capi- Grand Rapids-based CWD Real Es- Van Andel own half of Alticor Inc., Amway’s Ada- in Atlanta and has been “a dedicated home-schooler tal firm EDF Ventures. tate Investment, the Grand Rapids based parent. The stake — which they inherited in since 1998,” according to Alticor’s website. She has Ⅲ Two advertising employees of Business Journal reported. equal shares after their father, Jay Van Andel, died been a board member of the Heritage Foundation, a Walker-based Meijer Inc., Tracy Ⅲ Lake Michigan College near in 2004 — is valued at $4 billion, according to the political research firm, since 1996. Christen Gordon and Danny Kraig Benton Harbor is launching the Bloomberg Billionaires Index. Nan Van Andel is the only sibling no longer in- Vandermyde, are accused of em- Great Lakes Wine Institute, which Richard DeVos, 88, owns the other half of Alticor. volved in the family business. She’s president of the bezzling between $50,000 and the school contends will be the He has a $4.5 billion fortune, according to the Silverwing Foundation, also founded by her parents, $100,000 worth of gift cards and Midwest’s first commercial teach- Bloomberg ranking. which donates to religious causes. face as much as 15 years in prison, MLive.com reported. ing winery. Starting this fall, stu- Ⅲ A month after both sides said dents can earn an associate’s de- gree in the art, science and co-founded. Wood, a 25-year Dow they remained far apart in negotia- Retailer Family Christian files Dow settles with whistleblower business of wine making, the col- employee, also claimed she found tions, Bronson Methodist Hospital lege said in a release. for Chapter 11, owes $100M who claimed CEO spent lavishly millions of dollars in cost overruns and Detroit-based Blue Cross Blue Grand Rapids-based Family Christ- Midland-based Dow Chemical Co. during the renovation of the Dow- ian LLC, which sells Bibles, music, settled lawsuits by former company owned H Hotel in Midland. CORRECTIONS church supplies and other faith-re- fraud investigator Kimberly Wood, lated merchandise in 266 stores in 36 who claimed she was wrongfully MICH-CELLANEOUS Ⅲ A Page 1 story on Michigan’s craft brewing industry in the Feb. 9 issue states, filed for bankruptcy protec- fired for uncovering improper misspelled the last name of Mark Rieth, CEO of Atwater Brewing. tion with a plan to sell all its assets. spending by CEO Andrew Liveris Ⅲ National Cherry Festival officials Ⅲ An editorial on Page 8 of the Feb. 9 issue incorrectly said James Robert- The nonprofit listed assets and and others, Bloomberg News re- want to change their annual eight- son was given a Ford Focus by Suburban Ford.