Puerto Rico is a “State” under U.S. Bankruptcy Law: Foreshadowing Bankruptcy-Type Relief for Other “States”?

By Donald L. Swanson "We must decide whether Puerto Rico is a “State” for purposes of this [bankruptcy] pre-emption provision. We hold that it is." --Commonwealth of Puerto Rico v. Franklin California Tax-Free Trust, U.S. Supreme Court Case No. 15-233 (Decided June 13, 2016). The Bankruptcy Code definition of "State" is contained in Sec. 101(52) and... Continue Reading →

1899 Treatise (First Edition) on U.S. Bankruptcy Law

By: Donald L. Swanson Original-source documents from antiquity are always fascinating!  They provide a wealth of historical information and a wealth of insight into life in an earlier day. It’s mind-boggling, for example, to read the words of an author, who lived in an ancient time, writing about events of “ancient days” from his/her perspective-in-time.... Continue Reading →

City of Detroit Withstands Another Challenge to Its Confirmed Bankruptcy Plan

By: Donald L. Swanson Who knew that the City of Detroit’s confirmed bankruptcy plan is still in legal jeopardy? Well . . . it is.  But the jeopardy today is much-less than it was two days ago. Several Detroit pensioners had challenged the City of Detroit’s plan confirmation order because the plan reduced their benefits. ... Continue Reading →

10 Practical Lessons for Cities Facing Bankruptcy – From a New Ninth Circuit Ruling

By: Donald L. Swanson The Ninth Circuit Court of Appeals, in a new ruling, helps point-the-way for cities facing the complexities of Chapter 9 bankruptcy. The Facts On March 28, 2003, three citizens of Vallejo, California, have a violent encounter with two of Vallejo’s police officers.  A lawsuit ensues. Then, the City of Vallejo files... Continue Reading →

Can a City File Bankruptcy to Deal With Police Misconduct Liability? — “Good Faith” Requirement (Part 3 of 3)

By Donald L. Swanson “[I]t is unlikely that a city could file for bankruptcy solely for the purpose of shedding liability associated with unconstitutional police practices.” --Conclusion in a Report, dated 8/21/2016 and titled: “Who Pays for Police Misconduct in Bankruptcy Cities?” This conclusion is undoubtedly accurate when a City is capable of paying the... Continue Reading →

Will Police Misconduct Liability Allow a City to File Bankruptcy? — “Insolvent” Eligibility Standard (Part 2 of 3)

By Donald L. Swanson Hypothetical: A City has been struggling for years to provide adequate services. Then, the City and its police officer are sued for violating the plaintiff’s civil rights. A jury verdict is for many-millions of dollars—an amount multiple times the City’s annual budget. Defendants appeal. Plaintiff starts executing on the judgement. So... Continue Reading →

Police Abuse Claims and Municipal Bankruptcy — A New Report (Part 1 of 3)

By Donald L. Swanson Detroit’s mediated settlements are “an extraordinary accomplishment in bankruptcy and an ideal model for future municipal debt restructurings.” --Judge Steven W. Rhodes, from Detroit Bankruptcy’s Plan Confirmation Ruling A new report “Who Pays for Police Misconduct in Bankrupt Cities” is the title for the report of a study, published on August... Continue Reading →

The Detroit Bankruptcy Creates “An Ideal Model for Future Municipal [and Other?] Debt Restructurings”

By Donald L. Swanson Bankruptcy Judge Steven Rhodes declares in his Detroit plan confirmation opinion (Doc. 8257) that the mediated settlements: --Are “an extraordinary accomplishment in bankruptcy”; and --Create “an ideal model for future municipal debt restructurings.” With the benefit of hindsight, we can all agree with Judge Rhodes on both points. But why not... Continue Reading →

Multiple Mediators and Hundreds of Sessions for Detroit’s Mediation: Why / How it’s Done

Detroit’s use of multiple mediators and hundreds of mediation sessions is not surprising. How else could a Court deal with billions of dollars of debt and a multitude of creditors of a City that must keep operating and must meet the daily needs of its hundreds of thousands of inhabitants.

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