Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Municipal Bankruptcies Pit Pensioners, Bondholders Against Each Other
Author: Joel R. Glucksman
Date: April 16, 2013
Key Contacts
Back
Several cities have sought bankruptcy law protection under Chapter 9 of the Bankruptcy Code in recent months. A new analysis suggests that as the number of municipal bankruptcies in the U.S. increases, pensioners and bondholders may be in the center of the fight, according to Forbes.
Following Judge Christopher Klein’s decision to allow Stockton, California, to proceed with its bankruptcy petition, he noted the case would have large implications and that he would have to enter into unfamiliar territory regarding how to manage pensions and bondholder claims. Forbes reported there is a great deal of ambiguity regarding whether promises made to state-run pension systems should be honored above contracts from bondholders who loan cities money.
Further, judges who preside over municipal bankruptcies have considerably less authority in dictating how a city must manage its assets during proceedings than they would if presiding over a corporate bankruptcy.
To date, pension issues have been a central factor in recent municipal bankruptcies, including those in Central Falls, Rhode Island, and an upcoming case in Georgia.
William Rizzo of MBIA, a company that insures municipal bonds, told Forbes that the economic collapse is likely to lead to a string of municipal proceedings that will impact the nation as a whole.
“We’re certainly seeing stress across the country,” Rizzo told the news source. “The whole country’s feeling it.”
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Buying Commercial Property in New Jersey: Legal Guide for Small Businesses
Small businesses considering buying commercial property in New Jersey must evaluate a range of legal, financial, and operational factors. While ownership can offer long-term value and control, it also introduces significant risks if not properly structured. This guide outlines key considerations to help New Jersey business owners make informed decisions, minimize legal exposure, and successfully […]
Author: Robert L. Baker, Jr.
The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities
On January 28, 2026, staff of the U.S. Securities and Exchange Commission’s Divisions of Corporation Finance, Investment Management, and Trading and Markets issued a joint statement clarifying how existing federal securities laws apply to tokenized securities. The SEC’s “Statement on Tokenized Securities” does not establish new law, but it does provide greater clarity on the […]
Author: Dan Brecher
Common Legal Mistakes NYC and New Jersey Business Owners Make
Operating a business in the New Jersey and New York City metropolitan region offers incredible opportunities, but it also requires navigating a dense and highly regulated legal environment. From entity formation to regulatory compliance, seemingly minor legal oversights can expose business owners to significant risk. In our work with businesses throughout the region, our attorneys […]
Author: Dan Brecher
What Founders Can Learn From Start-up Suits
High-profile founder litigation is more than just a media spectacle. For startup founders, these cases underscore the legal and structural risks that can arise when rapid growth outpaces formal oversight. While launching a new company can be both an exciting and deeply rewarding endeavor, founders must be mindful that it also comes with significant risks. […]
Author: Dan Brecher
Corporate Governance Reviews: A Practical Guide for New Jersey Companies
Every New Jersey company should periodically evaluate its governance framework. Strong corporate governance protects directors and officers, builds investor confidence, reduces litigation exposure, and positions a company for sustainable growth. The first quarter of the year is a great time to evaluate your corporate governance practices and perform any routine maintenance needed to keep that […]
Author: Ken Hollenbeck
What to Do After Being Served with a Lawsuit: Steps to Protect Your Legal Rights
Being served with a lawsuit is one of the most stressful legal events a business or individual can face. Whether the claim involves a contract dispute, an employment matter, an intellectual property issue, or another legal challenge, the actions you take in the first few days can significantly shape the outcome of your case. Acting […]
Author: Robert E. Levy
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.