Reuters: Bankruptcy News: UPDATE 1-Judge affirms Central Falls, R.I. bankruptcy plan

Reuters: Bankruptcy News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-Judge affirms Central Falls, R.I. bankruptcy plan Sep 6th 2012, 18:48 Thu Sep 6, 2012 2:48pm EDT By Hilary Russ Sept 6 (Reuters) - Central Falls, Rhode Island, took a big step toward exiting bankruptcy on Thursday when a judge signed off on a plan that balances the impoverished city's budget for the next five years by hiking taxes, cutting employees and pensions and revising labor contracts. The case has garnered attention for its treatment of the city's bondholders, who remain unscathed while pensioners took a huge hit, in contrast with some other recent U.S. municipal bankruptcies. And the quick resolution of Central Falls' bankruptcy, filed in August 2011, may be one for the record books. "In my limited knowledge, this case is the fastest case in the history of Chapter 9 ... to go from filing to confirmation. It's a record time and a record efficiency," said Judge Frank Bailey from the bench. "I think that this is an example for not only Rhode Island but maybe the nation on how to run a Chapter 9." Bailey confirmed the debt adjustment plan in U.S. Bankruptcy Court for the District of Rhode Island. No creditors objected to the plan, and only 2 of 237 creditors eligible to vote on the plan cast ballots against it. Key elements of the plan - new collective bargaining agreements with public employee unions and cuts to pension and healthcare benefits - were the result of settlement agreements with workers and retirees, instead of lawsuits. In response to Central Falls' impending insolvency, Rhode Island passed a law giving bondholders a lien on property tax revenue and ensuring they continue to get paid in a municipal bankruptcy. With confirmation of the plan, the city's state-appointed receiver can now dispute some claims and begin paying out others. Some unsecured creditors could get a payment by Dec. 31. While elected officials are supposed to regain control of the city as early as January, they will have to certify to the court and the state's revenue department that they are abiding by the receiver's financial plan. If they stray from the plan, the court, which will retain jurisdiction, could force their hand. The court will also hold an annual status conference on the city's progress. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions