The Deal Pipeline | March.22.2012
This article, about municipal bankruptcies across the United States, quotes Sacramento restructuring partner Marc Levinson, counsel to the City of Stockton, CA.
Levinson, who testified against the original bill, terms the new law "a solution in search of a problem" due to the relative rarity of Chapter 9. (Levinson opposed the original draft of the bill, which would have given a mediator in the case the power to decide whether an entity should be able to file Chapter 9. The final draft of the bill, revised late last year, does not give a mediator that power.)
"We're going into this optimistic that mediation may be a way to avoid bankruptcy," Levinson says. "We don't know if it's going to work. If it works, then I would say it's a great model [for other states]."