Category Archives: Chapter 9

California has seen a string of three Chapter 9 filings this year and faces a long line of distressed municipalities. Given this backdrop, the California Public Employees’ Retirement System (“CalPERS”) figures to play a prominent role in the resolution of many of these situations (in or out of bankruptcy). Thus, the bond‑buying public will scrutinize closely any steps that CalPERS takes to protect its claims in the Bankruptcy Court. Continue reading →

Doug Mintz spoke at the 19th annual Distressed Investing Conference on November 26th. He helped moderate a panel regarding Municipal Debt Restructuring, drawing on his experience in the Jefferson County, Stockton and San Bernardino bankruptcies and other out of court matters. Continue reading →

On June 29, 2012, Judge Thomas B. Bennett of the Bankruptcy Court for the Northern District of Alabama held that operating expenses as determined under Jefferson County’s sewer warrants indenture do not include (i) a reservation for depreciation, amortization or future expenditures or (ii) an estimate for professional fees and expenses and that the monies remaining in the sewer system’s revenue account after the payment of actual operating expense should be paid to the warrant holders in accordance with the Indenture. This decision represents an unequivocal win for special revenue lenders because it ensures that special revenue bonds will continue to be secured and serviced in accordance with the underlying indenture during a municipality’s Chapter 9 case. The Bank of New York Mellon v. Jefferson Co., Ala. (In re Jefferson Co., Ala.), Case No. 12-00016-TBB (Bankr. N.D. Ala. June 29, 2012). Continue reading →

On April 20, 2012, the Supreme Court of Alabama held that Ala. Cod. § 11-81-3 (1975) does not require that an Alabama municipality have prepetition bond indebtedness as a condition of eligibility to file for bankruptcy under Chapter 9. The Supreme Court of Alabama issued its decision in response to a certified question from the District Court for the Southern District of Alabama regarding whether the City of Prichard, Alabama was authorized to file for Chapter 9 under Alabama law. See City of Prichard v. Scott A. Balzer, Case No. 1:10-0622-KD-M (Ala. Apr. 4, 2012). Continue reading →

On March 4, 2012, Judge Thomas B. Bennett of the United States Bankruptcy Court for the Northern District of Alabama held that Alabama law specifically authorized Jefferson County to adjust its debts under Chapter 9 of the Bankruptcy Code. Through a detailed analysis of Alabama law, Judge Bennett demonstrated that while the barriers to Chapter 9 may be daunting, they are not insurmountable (at least not in Alabama). Continue reading →