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Chapter 9 Cases |
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Part 25. Special
Topics
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Chapter 17. Bankruptcy
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Section 9. Bankruptcy
Processing of Chapter 9 Cases
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25.17.9 Bankruptcy Processing of
Chapter 9 Cases
25.17.9.1 (09-01-2004)
Chapter 9 – Adjustment of a Municipal Debt
1.
Qualifications. To
qualify as a debtor under Chapter 9, Adjustment
of a Municipal
Debt, an entity must, among other things:
·
be a
municipality
·
be
authorized to be a debtor by state law
·
be
insolvent or unable to meet its debts as they mature
·
desire to
effect a plan to adjust such debts
2.
Confirmation Binding. The
provisions of a confirmed plan under this Chapter
bind the debtor and any creditor, whether or not:
A.
a proof of such creditor’s claim is filed;
B.
such claim is allowed under 11 U.S.C. § 502; or
C.
such creditor has accepted the plan.
3.
Asset Proceeding. All
proceedings under Chapter 9 are to be treated as
"asset" cases.
4.
Prompt Counsel Involvement. If
Insolvency discovers a bankruptcy filing involving
debts of a municipality, immediate contact must be
made with Counsel for guidance. Chapter 9 is a
complex bankruptcy proceeding.
Note:
Because of the rare occurrence of a Chapter 9
bankruptcy,