Website Launches To Monitor Municipal Bankruptcies and Chapter 9 Filings In California

ENCINO, Calif., Oct. 25, 2012 /PRNewswire/ -- The rash of recent Chapter 9 filings among California cities is forging a trend that is likely to impact many more struggling municipalities, as well as their creditors, contractors, vendors, bond holders, unions, and taxpayers. The new website, www.Broke-Cities.com, is a one-stop resource for troubled cities and the many parties impacted by municipal bankruptcy. A project of the Municipal Bankruptcy Advisory Group, a consortium of bankruptcy, public affairs, finance, accounting, and communications experts, Broke-Cities.com closely follows Chapter 9 filings in California, as well as the status of the state's other troubled cities, towns and special districts that are confronting insolvency and considering municipal bankruptcy.

"The Chapter 9 filings we have observed this year appear to be the tip of the iceberg," states Douglas M. Neistat, Chair of the Municipal Bankruptcy Advisory Group. "Many more municipalities could be headed toward a similar fate." Mr. Neistat cites Moody's Investment Service's recent release regarding the anticipation of more bankruptcy filings and prospect bond defaults among California cities.

Municipalities are moving toward unfamiliar territory with little support to guide them through a very challenging process, according to Mr. Neistat. "We launched Broke-Cities.com to bring clarity and a strategic approach to the tremendously complex situation that many California cities and their creditors are now facing." The Municipal Bankruptcy Advisory Group will monitor the progress of current and anticipated Chapter 9 filings in California, and offer insights and commentary on the many issues surrounding the process.

According to the League of California Cities, the state is home to 478 incorporated cities and more than 3,500 Special Districts, independent government units that exist separately from the local governments that created them. These entities rely on public funds, have the power to tax, and are governed by boards of directors, commissioners, and/or boards of supervisors; and provide a wide range of essential services, such as airports, water ports, libraries, parks, cemeteries, hospitals, stadiums, and electric, power and gas utilities. Chapter 9 of the Bankruptcy Code was written to include not only municipalities, but any political subdivision or public agency. Consequently, the potential is great for a dramatic increase in the number of Chapter 9 filings. While these filings have been very limited in the past, the current economic turbulence points to a dramatic upswing. The problems leading to municipal bankruptcy are largely systemic, flowing from insufficient revenue to support bloated budgets; and in some cases, ineffective management and oversight.

Broke-Cities.com and the Municipal Bankruptcy Advisory Group were founded by and are projects of Greenberg & Bass LLP, an Encino, California-based law firm providing bankruptcy, insolvency, corporate and litigation legal services for nearly thirty years to public and private concerns throughout California and the United States.

For more information, contact Douglas M. Neistat at [email protected] or 818-382-6200.

SOURCE Broke-Cities.com; Greenberg & Bass LLP