The South Bay Law Firm Law Blog highlights developing trends in bankruptcy law and practice. Our aim is to provide general commentary on this evolving practice specialty.

  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • March 2014
  • September 2013
  • July 2013
  • June 2013
  • February 2012
  • January 2012
  • December 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • September 2009
  • August 2009
  • July 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • February 2009
  • January 2009
  • December 2008
  • November 2008
    Comments RSS
    Log in
      Bankruptcy and Insolvency News and Analysis Ė Week Ending October 21, 2016
    Auto Draft
    Auto Draft
    Bankruptcy and Insolvency News and Analysis Ė Week Ending October 14, 2016

    Posts Tagged ‘legislation’

    Will Municipal Debt Adjustment Be Limited in California? Inching Toward an Answer.

    Tuesday, April 27th, 2010

    Two prior posts on this blog (here and here) have traced the progress of an obscure – but potentially important – piece of California legislation designed to regulate the ability of local California governments to seek relief through the municipal debt adjustment process of Chapter 9.

    Based on :Image:Flag of California.svg. Create...
    Image via Wikipedia


    Relatively little-known California State¬†Assembly Bill 155 would, if voted and signed into law, require local public entities to first seek approval from the California Debt and Investment Advisory Commission (which operates under the auspices of the State Treasurer’s Office) prior to seeking the federal debt adjustment relief presently available to them by local government decision.

    Though ostensibly addressing the “debt” and “investments” of local governments, the bill is in fact¬†aimed squarely at protecting public employee unions who – unnerved by the 2008 Chapter 9 filing commenced by the City of Vallejo, California – have¬†backed the legislation since its introduction into the California legislature nearly 18 months ago.¬† According to analysis produced last July by the State Senate’s Local Government Committee, “labor unions and others want to require state oversight of local governments’ bankruptcy petitions.”

    Map of California highlighting Solano County
    Image via Wikipedia


    The reason?  Public employee pensions and other employee benefits.

    The details of public employees’ hiring and retention arrangements are typically governed by collective bargaining agreements (or “Memoranda of Understanding” in the context of public labor relations), brokered by the employees’ unions and their public employers.¬† As presicently noted in an article on municipal collective bargaining agreements authored 3 years ago, “Public sector unions have successfully obtained comparatively generous compensation and benefits packages even as the fortunes of American labor have continued to decline. In particular, municipal pensions may jeopardize the fiscal survival of many public sector employers.”

    With perrenial state and local budget deficits, declining property values and a shrinking tax base, and significantly reduced¬†revenues, many local governments are now in precisely the sort of “survival mode” suggested by this article . . . and the unions know it.¬† As a result, AB 155 has quietly made its way through the State Assembly and now appears poised to go to the State Senate floor.

    Is “bankruptcy by committee” an appropriate balance between state interests and local government control?¬† Does it hamstring local govrenment officials from responding effectively to a local fiscal crisis?¬† Because¬†municipal bankruptcies¬†have always been¬†used very sparingly, and¬†only 2 such proceedings (including Vallejo’s) have filed statewide since 2008, is¬†committee approval truly necessary?¬† Or is it merely a means by which public employee unions can improve their bargaining position outside of bankruptcy?¬† And what happens if a local government in financial crisis can’t get committee approval?

    These questions appear, to date, unanswered.

    But last week, AB 155 took a step forward, clearing the Senate’s Local Government Committee.¬† The bill will now go to the Senate Appropriations Committee for review.

    Reblog this post [with Zemanta]
      Email This Post  Print This Post Comments Trackbacks

    California’s Ongoing Efforts to Limit Municipal Bankruptcies

    Tuesday, June 9th, 2009

    Since late January, California’s state assembly has considered¬†legislation designed to impose additional hurdles on cities, services districts, and other California municipalities that need to rehabilitate themselves under Chapter 9.

    Supporters of California Assembly Bill 155 (AB 155)¬†– which requires California municipalities to to receive filing approval from a state panel prior to commencing a Chapter 9 proceeding – argue that the bill will preserve the credit-ratings of local municipalities and protect local taxpayers.¬† Opponents of the bill argue that it is merely an “end run” by public employees’ unions¬†around a process that permits municipalities to reject¬†union contracts and rehabilitate themselves.¬† Some additional background, and¬†a copy of the bill as introduced, is available on an earlier post on this blog.

    On June 3, AB 155 took a step toward passage when it cleared the California State Assembly by a vote of 43-16, with no Republican support.¬† A copy of the bill, as amended, is available here.¬† Governor Schwarzenegger has reportedly not taken a position on the bill, according to an article in Thursday’s Sacramento Bee.

    The bill now goes to the California State Senate.

      Email This Post  Print This Post Comments Trackbacks