On February 24, 2014, Chadbourne’s New York office hosted an expert panel to discuss the future of municipal restructurings. The panel brought together judges and other experts with experience in two of the largest municipal restructurings to date: Jefferson County, Alabama and the City of Detroit, Michigan.
The evening began with opening statements by Howard Seife, Chadbourne partner and Global Chair of the firm’s Bankruptcy and Restructuring Group, welcoming attendees, which included senior members of the municipal finance industry, to the firm’s new New York offices located at 1301 Avenue of the Americas.
The panel was moderated by Lawrence Larose, head of Chadbourne’s municipal bankruptcy practice, who has represented creditors in every major municipal restructuring. The panel consisted of the following individuals:
- Honorable Gerald E. Rosen, Chief Judge, United States District Court for the Eastern District of Michigan and Chief Mediator in the bankruptcy case of the City of Detroit, Michigan;
- Honorable Thomas B. Bennett, Chief Judge, United States Bankruptcy Court for the Northern District of Alabama and presiding judge in the bankruptcy case of Jefferson County, Alabama; and
- Richard Ravitch, former Lieutenant Governor of New York, consultant to Honorable Steven Rhodes (the presiding judge in the bankruptcy case of the City of Detroit, Michigan) on issues of municipal finance and viability, and currently an advisor to the Detroit Financial Review Board.
The panelists each made brief opening statements in which they all agreed that each municipal restructuring is unique and cannot be resolved by a single formulaic template. Larry Larose then led the panelists through a discussion of the following four topics: (1) whether the conditions that led to Detroit’s financial distress will be repeated in other municipalities; (2) whether pensions can be impaired as contract claims during a Chapter 9 bankruptcy proceeding; (3) the differing models for administering a Chapter 9 proceeding—comparing a mediation model to a litigation model; and (4) the future of municipal restructurings with an eye toward the current problems faced by Atlantic City, New Jersey and Puerto Rico.
A copy of the event materials, which review the lessons learned from Detroit’s bankruptcy case, recent developments in Puerto Rico, and an introduction to municipal bankruptcies, is available here.