Restructuring Partner Discusses Navigating Through Municipal Bankruptcies

The Wall Street Journal | September.12.2012

This article profile and Q&A with restructuring partner Marc Levinson discusses Marc's municipal bankruptcy work for the cities of Vallejo and Stockton in California. An excerpt from the article is included below.

WSJ: What advice do you give to cities that call when they face insolvency?

Mr. Levinson: To me personally -- not speaking for anyone else -- bankruptcy isn't a strategic option. It's the option when there are no other choices. The problem is the bankruptcy code requires insolvency now, not down the road.

If you see it [insolvency] down the road, then you must cut your expenses right away. Go to the unions and start making concessions now and then go to creditors and start negotiations. Bankruptcy is not a good option until it's the only option. By the time cities call me, they have gone through their reserves.