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When Political Will Is Not Enough: Control Boards in Municipal Finance Restructuring  


Author:  Harold  Horwich.; Seth  Pruss.


Source: Volume 32, Number 03, Fall 2011 , pp.59-86(28)




Municipal Finance Journal

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Abstract: 

Many municipalities and other publicly financed entities will need to rebalance their revenues and expenditures over the next few years. A great deal of public discussion has centered on the prospect of Chapter 9 proceedings. In Chapter 9 proceedings, a municipality can discharge debt without payment and reject executory contracts, including collective bargaining agreements. But, due to the limitations in the court’s jurisdiction, Chapter 9 cannot force fundamental operational and management changes in a governmental entity. Control boards appointed under state law can, and do, implement these types of changes. This article describes several of the control board regimes under state law, illustrates some of their successes, and comments on some of their shortcomings.

Keywords: Control Boards in New York; Pennsylvania; Illinois; Ohio; Rhode Island; Massachusetts

Affiliations:  1: Bingham McCutchen LLP; 2: Bingham McCutchen LLP.

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