The B-word

Yes, that word is bankruptcy.

NPR’s Talk of the Nation host Neal Conan in a recent broadcast took up the problem of cities filing for bankruptcy. Harrisburg, Penn., is the most recent, but of course Vallejo was a topic via the city’s bankruptcy attorney and its interim city manager. Listen to it and read a transcript of the interview.

Vallejo’s bankruptcy attorney, Marc Levinson of Sacramento, said that “Bankruptcy is always a bad choice, whether it’s Chapter 11 or Chapter 9. But it becomes a very good choice when it’s the only choice.”

Vallejo is about to come out of bankruptcy, the interview says. Levinson also said that since May 2008 when Vallejo filed no other California cities have experienced a systemic failure like it.

“And why is that?” Levinson said.  “Because Vallejo has helped set some of the ground rules for what can and cannot happen in a Chapter 9 case. And cities and their creditors have been able to work out arrangements to avoid bankruptcy since. And that’s the way it ought to work.”

Don’t forget former Record reporter Dan Thigpen who trekked to Vallejo in May and filed these stories looking at that city’s bankruptcy through Stockton’s lens.

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