Calif. Cities At Greater Risk Of Bankruptcy, Report Warns

Law360, New York (August 17, 2012, 5:19 PM EDT) -- Californian municipalities are at greater risk of going bankrupt, thanks in part to new legislation that essentially puts stressed areas on track for Chapter 9 filings, according to a Moody's Investors Service Inc. report released Friday.

An economic, legal and policy environment perfect storm is making California's cities more prone to file for bankruptcy, the report said, also citing as factors the state's “boom-bust” real estate economy and its hands-off policy toward local governments' fiscal problems.

“As a consequence of the adverse economic and fiscal governance...
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