The Money’s Not There
Another municipal bankruptcy — more unfunded pensions.
Pensioners will sue — good luck. And that doesn’t help them right now:
The city of Prichard (AL) filed for bankruptcy Tuesday in an attempt to cope with the debt created by fighting lawsuits and addressing the demands of unpaid and agitated retired city employees.
The Chapter 9 filing marks the second time in a decade that the city declared it was out of money. Mayor Ron Davis, who just two years ago helped the city pay off its creditors from the 1999 bankruptcy, blamed the latest financial crisis in part on a flawed municipal pension plan.
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Chapter 9 bankruptcy allows financially troubled municipalities to reorganize debts without the threat of creditors.
“This is not going to stop us from pursuing litigation,” Hedge said. “If anything, it’s going to make me more determined.”
The pensioners did not receive their October checks, which equate to a total of about $150,000, and Hedge said he did not expect they would receive payments in November.
Link from Instapundit.
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This guy in Ireland doesn’t sound too hopeful.
Comment by BMB — 11/4/2009 @ 12:43 pm
Talk about a municipality going bankrupt is kind of small potatoes compared to whole countries going bankrupt. Ireland is about ready to hit the wall and everybody realizes that can’t be allowed to happen. There is going to be some kind of “Hail Mary” pass thrown by the EU/ECB/IMF to paper over this.
But really… It is just more kicking the can down the road because there are other countries on the same trajectory. This deflationary spiral is starting to get serious.
Comment by EDN — 11/4/2009 @ 12:56 pm
Maybe that’s why the Lisbon Treaty was voted in this time around.
Hopefully the Czechs aren’t in a similar position (anyone want to conjure up a new conspiracy theory tying the bad economy to the bildiberger group, the FRC, and getting the rogue countries to sign the Lisbon Treaty…oh wait, I think that Jones guy already made a video on it).
What I *will* find interesting is the effect of failing Eurozone countries on the GBP/EUR and the EUR/USD ratios. One would think it might weaken their currency. I still think if the Euro ever passes the Pound, Britain will jump on the Euro bandwagon (not like Tony Blair isn’t trying to become the first President of Europe or anything).
Comment by Andrew — 11/5/2009 @ 12:20 am