Feb
WSJ: More cities considering filing for Chapter 9 Bankruptcy
Filed Under (Featured Articles, Lead Story, Life, News, Society) by Jean Valjean on 18-02-2010
Tagged Under : bankruptcy, Chapter 9, Harrisbug, recession, WSJ
If you believe the lies you hear about the worst being behind us in this recession, I have a bridge to sell you. The worst is yet to come. Case in point, today the Wall Street Journal has an article which has been common knowledge for some folks for a while: many cities and communities will end up having to declare bankruptcy when they finally can’t pay their bills:
____________________Just days after becoming controller of financially strapped Harrisburg, Pa., in January, Daniel Miller began uttering an obscure term that baffled most people who had never heard it and chilled those who had: Chapter 9.
The seldom-used part of U.S. bankruptcy law gives municipalities protection from creditors while developing a plan to pay off debts. Created in the wake of the Great Depression, Chapter 9 is widely considered a last resort and filings under it are more taboo than other parts of bankruptcy code because of the resulting uncertainty for everyone from municipal employees to bondholders.
Written by Jean Valjean
Why aren’t pensioners considered an administrative expense in a Chapter 9 case since they are retired employees and delivered manual labor as current employees? We are being told no one knows what status we hold in the Chapter 9 filing by the City of Prichard, Alabama. So, if no one knows, who decides? This pension fund was created by the Alabama State Legislature. If anyone could help me I would appreciate it. Thank you.