Connecticut’s Capital City Threatens to File for Bankruptcy
According to an article by Joseph De Avila in the Wall Street Journal, “[Hartford]City officials warned Gov. Dannel Malloy, a Democrat, and state lawmakers that Hartford, which has a deficit approaching $50 million, wouldn’t be able to pay all of its bills within 60 days. Hartford officials said it would file for bankruptcy at that point unless the state legislature passes a budget that gives the city more funding or otherwise provides it with more cash.” Municipalities can file for bankruptcy under Chapter 9 of the Bankruptcy Code, a chapter that is rarely used compared to the other bankruptcy chapters. The article reports that according to Attorney James Spiotto only 64 bankruptcies have been filed by municipalities in the past 63 years.