-- Last revised Tuesday, November 12, 2002, 12:19 PM --
Municipal Bankruptcy
The Law Revision Commission recommended a number of revisions to
update California statutes authorizing bankruptcy filings by local
public entities under Chapter 9 of the federal Bankruptcy Code.
Consistent with the approach historically taken in California, the
general statute would authorize municipal bankruptcy filings to the full
extent permissible under federal law, subject to any special statutory
rules applicable to particular entities. The Commission's recommendation was enacted by the Legislature. See below.
The Commission studied broader substantive reforms, including proposals
to require prefiling approval by the Governor or a governmental
committee, and to provide for postfiling review by appropriate state
authorities. However, there does not appear to be any general agreement
on the best approach to reform, or even as to the need for additional
protections or controls. Accordingly, the Commission is not recommending
any broader substantive reforms at this time.
If you have questions or comments on this study, send email to Nathaniel Sterling at sterling@clrc.ca.gov.
