The commonalities between municipal and corporate restructuring situations are obvious and extensive. After all, they both function to achieve the fairest possible outcome when a debtor can no longer pay what it owes to its creditors. However, the lessons of the past few years highlight that municipalities, creditors and restructuring professionals must not discount some of the nonfinancial and legal factors that make Chapter 9 and Chapter 11 vastly different. One of the biggest distinctions between a corporate and municipal restructuring is the outsized role that the media, politics and stakeholder communications play in shaping the situation’s outcome.

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