Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Municipal Bankruptcies Pit Pensioners, Bondholders Against Each Other
Author: Joel R. Glucksman
Date: April 16, 2013
Key Contacts
Back
Several cities have sought bankruptcy law protection under Chapter 9 of the Bankruptcy Code in recent months. A new analysis suggests that as the number of municipal bankruptcies in the U.S. increases, pensioners and bondholders may be in the center of the fight, according to Forbes.
Following Judge Christopher Klein’s decision to allow Stockton, California, to proceed with its bankruptcy petition, he noted the case would have large implications and that he would have to enter into unfamiliar territory regarding how to manage pensions and bondholder claims. Forbes reported there is a great deal of ambiguity regarding whether promises made to state-run pension systems should be honored above contracts from bondholders who loan cities money.
Further, judges who preside over municipal bankruptcies have considerably less authority in dictating how a city must manage its assets during proceedings than they would if presiding over a corporate bankruptcy.
To date, pension issues have been a central factor in recent municipal bankruptcies, including those in Central Falls, Rhode Island, and an upcoming case in Georgia.
William Rizzo of MBIA, a company that insures municipal bonds, told Forbes that the economic collapse is likely to lead to a string of municipal proceedings that will impact the nation as a whole.
“We’re certainly seeing stress across the country,” Rizzo told the news source. “The whole country’s feeling it.”
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
New Jersey’s Revised UHAC Regulations: What Residential Developers Need to Know About Affordable Housing Commitments
New Jersey residential developers with affordable housing obligations should carefully review their existing approvals, development agreements, and proposed deed restrictions in light of the State’s revised UHAC regulations (Uniform Housing Affordability Controls). The regulations, which took effect on November 6, 2025, significantly change the administration and physical requirements for affordable housing units. For developers with […]
Author: Wendy Rubinstein Quiroga
“No Comment” Culture: Why Silence Is Often the Riskiest Legal Strategy
A “no comment” response is sometimes the right call when a legal problem arises. As a blanket policy, however, it lets allegations go unanswered, deadlines pass, evidence disappear, and manageable disputes grow into expensive litigation. The businesses that fare best are usually the ones that say little publicly while acting decisively behind the scenes. When […]
Author: Sean M. Pena
Utility-Scale Battery Storage Projects: A Legal Roadmap for Developers, Property Owners and Other Stakeholders
Utility-scale battery energy storage systems (BESS) are becoming an increasingly important component of the electric grid throughout New Jersey, New York, and Pennsylvania. As renewable generation expands, electricity demand increases and grid operators seek greater flexibility, battery storage can help balance supply and demand while providing additional capacity and reliability. For developers, battery storage presents […]
Author: Nicholas Wall
Navigating Disputes: Hire a Partnership Dispute Lawyer
A falling out between partners can be disastrous for any business. In many cases, the partnership will not survive. If you are in an unworkable situation with your partners, it may be time to consult a partnership dispute lawyer experienced in handling partnership breakups and dissolutions before the situation deteriorates any further. It is easy […]
Author: Jay McDaniel
Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know
When a company enters Chapter 11 bankruptcy, many assume the process will culminate in a lengthy reorganization plan. However, distressed businesses are increasingly being sold through a different mechanism — a sale under Section 363 of the United States Bankruptcy Code. A Section 363 sale allows a company, as a debtor-in-possession in bankruptcy, to sell […]
Author: John D. Giampolo
Zoning Laws Explained: What You Need to Know Before Buying Property
Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]
Author: Wendy Rubinstein Quiroga
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.