City Should File Bankruptcy

Several cities across the country have filed bankruptcy over the past few years.
Middletown could wipe the debt off their books with a bankruptcy.
Word is topic was discussed at a recent Gilleland staff meeting.

Why not do it and start over?

Don't know the ramifications for a city filing bankruptcy. Wouldn't that kill any chances for credit in future years? IE. eliminate the cities borrowing opportunities? How about the city rating for bonds and will the filing effect any grants, fed handout money and other deals that cities occasionally enjoy? Filing certainly won't help a city already heading to the bottom. Other options? State takeover on running the city? Would we get rid of Gilleland and company if that were to happen? Dunno.

TonyB wrote: ... but when I don't have enough money to pay for the things I want, I cut back to buying only the things that I need! ... Isn't that what they are supposed to be doing?

TonyB,

At least we got the roof off the City Centre Mart?

M29....this is a head-fake isn't it? Middletown is not bankrupt. They haven't attempted to sell any assets, spent (or rather approved $1.1 Mm on the Land Bank they will take out of the public safety levy), spent $60,000 on getting a special election ballot to disrupt and stymie voter turnout in August (suppress is the proper word), pay consultants annually $150,000-$200,000 for prviding no value add), own a golf course, an airport, how many buildings downtown and else where----and you suggest the city discussed bankruptcy? Its a head fake, the city is not near bankruptcy, but is spending very dangerously to benefit a handful of individuals. Perhaps you meant morally bankrupt?  

You are making reference to a Chapter 13 re-structuring. I don't believe the city has reached a point that its debt ratio is greater per month, than its cash-flow, and it makes its monthly payments timely. The only advantage would be the restructuring would allow debt restructuring and also help with pension liabilities, to the point the Ohio R.C. would allow, which is rather limited. It would be much better to negotiated with creditors than attempt a Chapter 13 restructuring. I do not believe Chapter 11 is a possibility.

I'm astounded this even came forth in a serious conversation (if it did at all). Chapter 13 would not wash the debt away, it just restructures it, and the city would have to make serious efforts to liquidate assets before Chapter 13 even undertaken, which it has not.