New Extension papers explore municipal bankruptcy

In this unsteady economy, the chances of a city undergoing bankruptcy increases. Never reaching that point would seem to be the ideal goal for any municipality. However, cities and other districts may need to resort to bankruptcy when other methods fail to lift them out of debt.

To better understand Chapter 9 municipal bankruptcy, Michigan State University Extension conducted a simulation exercise based on historical data from a U.S. city and recently put out a staff paper presenting the lessons learned from that exercise.

Find “Chapter 9 Bankruptcy: Simulation Exercise Staff Paper” and its companion white paper on the MSU Extension website at http://msue.anr.msu.edu/resources/municipal_bankrupty.

MSU Extension specialist and MSU Department of Agricultural, Food, and Resource Economics (AFRE) faculty member Dr. Eric Scorsone, MSU Extension specialist Nicolette Bateson, and MSU College of Law graduate student and graduate assistant in AFRE Amanda Wright wrote the staff paper. Amanda also authored the white paper.

Read more about the paper and municipal bankruptcy here.

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