Source: http://www.tmajcr.org/journalofcorporaterenewal/nov_dec_2013?pg=21
Timestamp: 2019-04-20 08:56:35+00:00

Document:
Chapter 9 is a powerful tool and, in the right circumstances, is useful in providing municipalities the breathing spell and control necessary to focus on improving their finances and operations while, most importantly, providing essential services to their residents. Given the rise in the number of troubled municipalities across the country, turnaround professionals would be wise to retool their practices and obtain at least a basic understanding of Chapter 9.
Fortunately, while Chapter 9 raises a host of new and complex issues, seasoned turnaround professionals with experience in dealing with Chapter 11 should have no trouble understanding many of its key concepts.
1 11 U.S.C. § 101( 40).
2 11 U.S.C. § 109(c)( 2).
3 CBO Economic and Budget Issue Brief, “Fiscal Stress Faced by Local Governments” (December 2010).
4 11 U.S.C. § 109(c)( 1)-( 5).
5 11 U.S.C. § 903.
6 11 U.S.C. § 904.
Brendan Best (top photo) is a partner at Schafer and Weiner PLLC, a business restructuring boutique law firm located in Bloomfield Hills, Michigan, and Paul R. Hage is a partner in the Insolvency & Reorganization Practice Group at Jaffe Raitt Heuer & Weiss, P.C. in Southfield, Michigan. Best represents debtors, secured creditors, creditor committees, and other parties in interest in complex workouts and restructurings across a wide variety of industries, including automotive, health care, and real estate. Hage represents the full range of debtor and creditor parties in bankruptcy and other insolvency proceedings nationwide. He currently serves as president of the TMA Detroit/Grand Rapids Chapter. Best can be reached at bbest@schaferandweiner.com, and Hage can be reached at phage@jaffelaw.com.
Breaking Loan,” Reuters.com, August 29, 2013.
(Bankr. E.D. Cal. 2012) (Section 922(a) stay prohibited litigation against the city manager and others for wrongful termination).
9 11 U.S.C. § 922(b).
10 11 U.S.C. § 922(d).
11 In re City of Vallejo, 403 B. R. 72, 78 9Bankr.
179 B.R. 177, 181 (Bankr. C.D. Cal. 1995).
12 NLRB v. Bildisco & Bildisco, 465 U. S. 513 (1984).
13 11 U.S.C. § 941.
14 Unlike Chapter 11, the “best interest of creditors” test does not compare the plan to a liquidation analysis (since a municipality cannot be liquidated); rather, the “best interests” requirement of Section 943(b)( 7) is generally regarded as requiring that a proposed plan provide “a better alternative for creditors than what they already have,” which in most cases should be an easy fact for the debtor to establish. See In re Mount Carbon Metro. Dist., 242 B. R. 18, 34 (Bankr. D. Colo. 1999).
15 11 U.S.C. § 943(b).

References: § 101
 § 109
 § 109
 § 903
 § 904
 § 922
 § 922
 v. 
 § 941
 § 943