Debt Adjustments for Municipalities Under Chapter 9 of the Bankruptcy Code: A Collier Monograph

This Collier Monograph presents a thorough treatment of chapter 9 of the Bankruptcy Code. Chapter 9 is a powerful yet underutilized restructuring tool available to financially challenged municipalities and public corporations within the United States. It provides an express means to compromise municipal obligations against a creditor's wishes, unlike state law, which generally speaking, cannot impose an involuntary debt reduction or contract impairment. Chapter 9 also gives a municipality the ability to operate while in bankruptcy with relatively minimal judicial oversight, protected by the automatic stay, free of the risk of a competing plan, liquidation, the appointment of a trustee or many of the other controls that normally act as a check upon a debtor during a bankruptcy reorganization case. The topics covered include:

•  the purpose of municipal bankruptcy

•  nonbankruptcy alternatives to chapter 9

•  comparison of chapter 9 to chapter 11

•  prepetition planning, including negotiations with creditors and creation of a restructuring plan

•  eligibility to file under chapter 9commencement of the chapter 9 case

•  a municipality's operating in chapter 9

•  reducing liabilities and exiting bankruptcy

•  history of chapter 9 and

•  a listing of chapter 9 state authorizing statutes.

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