Vallejo, California, Officials Vote for Bankruptcy

[Meister]

How can a city go bankrupt? I know they ran out of money, but the taxes keep rolling in. It's not like a personal or corporate bankruptcy where it is game over. The city is basically going to say "the hell with our bills". We'll just absolve ourselves from our obligations and start at zero. There are no consequences?

http://www.bloomberg.com/apps/news?pid=20601087&sid=aCWpB6JlHN9Y&refer=home

 

[3Tees]

I believe that it is more of a hardball ploy than anything else. As quoted in the article...

"City and labor union officials have been meeting since January to revise the existing contracts. The unions have balked at pay cuts. By filing for bankruptcy, Vallejo is asking a judge to step in and force salary concessions from the labor unions.

Once the city files its petition, a federal bankruptcy judge must decide whether the city is actually insolvent. If so, the case can proceed. If the judge rules Vallejo isn't legally broke, the case would be dismissed, said the city's bankruptcy attorney Marc Levinson of Orrick, Herrington & Sutcliffe."

 

[goodtime]

As sugggested, not to yield to union/gov workers, more opp to hire part-timers & fillers. ie: Hispanic workers. Hope Uncle A's taxes won't go thru the roof.

Btw, O.C. was another Calif that went bankrupt in the 90's.