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Chapter 9: Legal and Liability Issues Although this chapter may be used as a guideline for legal and liability issues, it is recommended you contact your local County Counsel on these matters. RISK
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Chapter 9 of the bankruptcy code provides for the reorganization of municipalities.
Municipalities, such as cities and towns, are required to file for chapter 9 bankruptcy.
Chapter 9 bankruptcy requires municipalities to develop a plan to restructure their debts and present it to creditors for approval.
The purpose of chapter 9 bankruptcy is to provide financially distressed municipalities with a mechanism for reorganization and debt relief.
Chapter 9 bankruptcy requires municipalities to report their financial situation, debts, assets, and proposed reorganization plan.
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