Bankruptcy
Dec. 6, 2011
Chapter 9: Refuge of last resort for municipalities
Chapter 9 can allow a California municipality some breathing space from debt collection efforts. By David Kupetz of SulmeyerKupetz
Local government budget deficits are a national problem. In the November 2011 issue of Vanity Fair, Michael Lewis writes that you can pluck almost any city at random in California and enter a financial crisis.
What happens when a California municipality is unable to pay its debts? Creditors may obtain judgments against the municipality. Moreover, the California Government Code requires a local public entity to pay the full amount...
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