Government Reorganization and Restructuring

We have drafted more than 300 executive orders and directives, including orders merging state departments, consolidating the functions of 12 public corporations into a single debt issuer, and centralizing administrative rules and hearings, human resources, accounting, grant management, and permitting functions.

We have also authored and assisted with the passage of legislation providing for the sale of a former state hospital property to a global automotive OEM for the construction of a technical center, with successful defense of the legislation and real estate transaction before the Michigan Supreme Court.

Building on experience gained a decade earlier in the privatization of the Michigan workers’ compensation fund, in 2015, Dykema represented the Michigan Insurance Commissioner on the conversion of the State of Michigan’s largest health insurer from a special purpose state corporation to an independent not-for-profit mutual insurer.

Dykema boasts a dedicated Public Retirement Team with extensive experience working with and through the federal and state retirement laws—including Internal Revenue Code provisions, state statutes, and federal and state case law governing state and local retirement plans, including OPEB liabilities.

Dykema has served as consultant and special legal counsel on the State of Michigan’s defined benefit (DB) plans, as well as its 401(k) and 457 defined contribution (DC) plans for two decades, helping the State convert its DB pension plan to a hybrid DC plan, and implement graded health care, banked leave time, sick leave conversion, and employee health care payment and cost-sharing solutions. These changes have generated significant savings for the state, school districts, and local governments in Michigan.

Members of the public retirement team have drafted multiple reform provisions for state and local pension and retiree health plans, and have lectured on Distressed Municipalities: The Battle Outside Bankruptcy.

Dykema has extensive experience creating and implementing governmental restructurings. In 2014, we helped Detroit Water and Sewerage Department (DWSD) restructure its $6 billion debt portfolio in a voluntary market driven alternative to cram-down in the City of Detroit bankruptcy, making successful regionalization of the enterprise possible.

In 2015 and 2016, we worked with the State of Michigan to restructure the school district of the City of Detroit, protecting $1.4 billion in state contingent liabilities.

Dykema has been a leader in structural educational reform since authoring charter school legislation in the early 1990s, successfully defending the legislation’s legal challenges and representing state universities in establishing and overseeing public school academies in the last 20 years. Dykema has assisted with the consolidation, annexation and the dissolution of public school districts, with the conversion of traditional districts to charter districts.

In 2008 and 2009, Dykema lawyers drafted and assisted in the enactment of legislation enabling the successful regionalization of the City of Detroit’s convention center, insulating it from city liabilities. This legislation was significantly based on legislation Dykema had drafted in 2002 creating a new independent authority to operate the State’s largest airport.

Our team assisted with the conversion of the State of Michigan's business tax model, initially in 2007 from a value-added tax to a hybrid income tax and modified gross receipts tax, and subsequently in 2011 to a corporate income tax model that substantially altered tax credits. We have secured legislative enactment of a new process for the collection of delinquent property tax (Public Act 123 of 1999) and advised county treasurers, municipal treasurers, and land title professionals on the implementation of the tax collection and foreclosure process.

In 2014, our lawyers conceptualized and authored legislation eliminating taxes on business equipment while holding affected local governments harmless from lost revenue and assisted in securing legislative approval, and approval by Michigan voters in a statement referendum.

Dykema has drafted, negotiated, and secured enactment of legislation establishing land bank authorities for return to productive use of tax-reverted and abandoned properties and other economic development activities.

Our lawyers drafted and assisted in the passage of legislation authorizing business improvement districts in Michigan, and conceptualized and drafted intergovernmental agreements to create a “virtual city” to develop efficiencies and consolidate back-office functions and other governmental services of local governments on a statewide basis.

Dykema lawyers also authored legislation enabling the creation of the nation’s first nonprofit street rail car system in Detroit, and we represent the nonprofit as it partners with the federal, state, and local governments to begin providing the first street car service in Detroit since 1956.

In 2018, Dykema helped the State of Michigan secure $600 million in  much-needed transportation funding by acting as bond counsel on its first ever P3 bond deal issued through the Michigan Strategic Fund.

In 2009, we worked with the Michigan Finance Authority to restructure its more than $1 billion student loan portfolio following the collapse of the auction rate market, eliminating significant contingent liabilities in the process.

In 2011 and 2012, we worked with the governor’s office and various departments to refinance $3 billion in unemployment trust fund loans from the federal government, eliminating an unsustainable federal liability.

In 2013, we assisted the State of Michigan in amending the Emergency Municipal Loan Act to provide new forms of financing for distressed municipalities. At the same time that we advised on the restructuring of the Detroit Water and Sewerage Department, we helped create the first-of-its- kind debtor in possession financing (DIP) and secured exit financing for the City of Detroit.

Our team of professionals includes attorneys who have worked with and for the State of Michigan, representing the interest of the executive branch and governor, state universities, and numerous government officials and entities.

Our team regularly represents governmental agencies, boards and public bodies. We have broad experience counseling such entities on a variety of issues, including public records laws, open meetings issues, conflicts of interest matters, procurement matters, political and gift ban restrictions, ethics compliance, and transparency initiatives.