New law alters local-government bankruptcy process - latimes.com
Under the new law, written by Assemblyman Bob Wieckowski (D-Fremont), cities would have undergo an evaluation from a neutral third party or declare a fiscal emergency, stating it will default on its bills within 60 days before it can claim insolvency.
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This is the latest in the conflict between a number of California cities and the public employee unions. In Chapter Nine proceedings the cities can do away with the obligations of their contracts with the unions, and the threat of doing that has become a bargaining chip in negotiations. Thanks to Fred Pilot for the link.
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