Vendor Solution Session: Chapter 9 – Is It the Answer for Financially Challenged Municipalities?
12:00 – 12:50 p.m
Financial pressures brought on by unfunded mandates, reduced funding by state and federal sources, long-term legacy obligations, collective bargaining agreements and over-taxed residents/businesses have confounded efforts by municipal governments to address funding obligations for operations and commitments into the future. Many are now looking to Chapter 9 of the Bankruptcy Code as an alternative. Chapter 9 provides a forum and a judge to oversee the reorganization of a municipality’s financial affairs. It also offers a degree of breathing room from creditor enforcement actions to provide time to formulate plans for an adjustment of debt. But the bankruptcy process is costly and the process provides no substitute for the political will required to achieve an effective result. Our panel will address how to use Chapter 9 as a vehicle to effectively navigate serious financial issues, and analyze its many requirements, benefits and pitfalls.