Municipal Bankruptcies - Chapter 9

The purpose of chapter 9 of the Bankruptcy Code is to provide a financially distressed municipality with protection from its creditors while it develops and negotiates a plan for adjusting its debts. Reorganization of the debts of a municipality is typically accomplished by extending debt maturities, reducing the amount of principal or interest, refinancing the debt by obtaining a new loan, or implementing an extended repayment plan. Chapter 9 is different from other types of bankruptcies because there is no ability to liquidate the assets of the municipality and distribute the proceeds to creditors (as in a corporate bankruptcy). The firm’s substantial chapter 9 experience provides depth and resources in municipal bankruptcies that few firms can match.