Chapter 9
Chapter 9 is a chapter of the Bankruptcy Code of the United States that the restructuring of in bankruptcy geratenen communities governs.
General
Chapter 9 is part of the US Bankruptcy Code (BC), as Book 11 ( English title 11 ) of the United States Code (11 USC). The correct long form is therefore "Chapter 11 of Title 11 of the United States Code". The existing financial compensation can - and should not - prevent states or in the level underneath public authorities insolvent and (in bankruptcy English bankruptcy go). The financial equalization does not provide for transfers that help financially weaker states. While in Germany states , municipalities and municipal associations insolvency incapable are because over their assets , a bankruptcy procedure is illegal ( § 12 para. 1 Insolvency Act ), municipalities may become insolvent in the USA.
Norm addressees
Addressees of the existing today since 1934. Chapter 9 are below a state of being moved Towns ( English Local Governments ), purpose districts ( English special-purpose districts ), and public facilities ( English public entities ); all summarized as English municipalities , which are allowed to file for bankruptcy with the consent of the state. In contrast to Chapter 11 for companies , there is no liquidation , but a restructuring process in which local creditors have to reschedule but also debt relief , and the local authority concerned continues to exist after the process is completed. In addition, Chapter 9 does not provide for an emergency sale of municipal property, and accordingly no distribution of the proceeds to the creditors.
history
In 1790, the first US Treasury Secretary, Alexander Hamilton , assumed that the central government of the USA was behind the creditworthiness of the states. The no-bailout clause , which is still in force in the USA today, dates back to 1842, when over-indebted states unsuccessfully asked the central government for financial help, but it did not intervene. As a result, 12 states went bankrupt. The first payment default ( English default ) of a community reported in 1839 Mobile (Alabama) .
In August 1933, Arkansas filed for insolvency with a highway bond , a special-purpose district. At the time Chapter 9 was introduced in 1934, 2,019 local governments were in default.
Between 1929 and 1937 during the Great Depression there were 4,771 defaults, mostly on municipal bonds ( English general obligation bonds ). Between 1839 and 1983 there were 6,200 reported defaults on municipal bonds. The rating agency Moody's , according to 54 "municipal bonds" reported from 1970 to 2009 a total of a default, of which 78% of the health care and real estate financing . 1978 saw the first default on a “general obligation bond” by Cleveland since the Great Depression. New York City (October 1975), Orange County (December 1994), Jefferson County (Alabama) (November 2011), Stockton (California) (June 2012) and Detroit (March 2013), all of them “municipalities”, were particularly spectacular bankruptcies in modern times. .
Today's Chapter 9 is the result of a change in law made in 1978 due to the serious financial crisis in New York City in 1975, for which the application of the old Chapter 9 proved unsuitable. Another change from 1988 deals with the exclusion of the "revenue bonds" and the types of taxes and charges that "secure" them from municipal insolvency proceedings.
content
Only a “municipality” can apply for legal assistance under Chapter 9 (11 USC § 109 (c)). The only competent court is the United States Bankruptcy Court . The term “municipality” is defined as a “political subdivision or public body or instrument of a federal state” (11 USC § 101 (40)). This definition is very general, so that this includes cities , counties , townships (, school districts english district school ) and public construction projects can be detected. It therefore also includes toll projects such as bridges or highways . Eligibility to apply presupposes that the “municipality” is recognized and authorized as a debtor by the state, that it is insolvent according to 11 USC § 101 (32) (C); it must present a restructuring plan and negotiate with the creditors (11 USC § 109 (c)). After the proceedings are opened, the bankruptcy court will inform the public (11 USC § 923). This is followed by a judicial enforcement and payment prohibition ( English automatic stay ), so that the creditors are no longer allowed to accept or utilize any payments or assets from the debtor (11 USC §§ 362 (a), 901 (a)). While the debt servicing of “general obligation bonds” is suspended during the course of the proceedings, it may expressly be maintained for “revenue bonds” (11 USC § 928).
The competences of the court and the creditors are much more limited than with Chapter 11.
See also
Individual evidence
- ↑ Yahua Qiao, Interstate Fiscal Disparities in America , 1999, p 161
- ↑ Jonathan A Rodden / Gunnar S. Eskeland / Jennie Ilene Litvack (Ed.), Fiscal Decentralization and the Challenge of Hard Budget Constraints , 2003, p. 64
- ↑ United States Congress House / Committee on Interior and Insular Affairs. Subcommittee on Mining, Forest Management, and Bonneville Power Administration (Ed.), Washington Public Power Supply System , 1983, p. 433
- ^ Joe Mysak, Encyclopedia of Municipal Bonds , 2012, p. 6
- ↑ Ashton vs. Cameron County Water District , No. 1, 298 US 513, 533, 56, 1936, 1309, 1315
- ^ Joe Mysak, Encyclopedia of Municipal Bonds , 2012, p. 45
- ↑ United States Congress House / Committee on Interior and Insular Affairs. Subcommittee on Mining, Forest Management, and Bonneville Power Administration (Ed.), Washington Public Power Supply System , 1983, p. 433
- ^ Joe Mysak, Encyclopedia of Municipal Bonds , 2012, p. 44
- ↑ Bonds that are repaid from tolls or other fees
