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City Doesn’t Need Approval To Settle Claims During Chapter 9
David S. Kupetz, Category: Municipal Debt Adjustment
Los Angeles Daily Journal,
February 12, 2013
David Kupetz, who has developed a unique specialty in handling Chapter 9 bankruptcy cases, wrote an article published by the Los Angeles Daily Journal on February 12, 2013 regarding the Chapter 9 filings of the cities of Stockton and San Bernardino. In his article, he discusses the issues that arise out of governmental agencies handling their own bankruptcy cases and the approval or disapproval of proposed settlements.
“The bankruptcy court presiding over Stockton’s Chapter 9 case issued a written opinion on February 5 ruling, over the objection of capital market creditors, that a municipal debtor does not need court approval to settle claims during a Chapter 9 case. Further, the bankruptcy court explained that without the municipality’s consent, the court is precluded from interfering with the city’s property or revenue and, therefore, could not disapprove a proposed settlement.”