Legal News

Atwater Fourth City in California Moving towards Bankruptcy
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

On Wednesday night, the city council of Atwater, California declared a fiscal emergency placing the city of 28,000 on the path towards bankruptcy. Three cities in California, Stockton, Mammoth Lakes, and San Bernardino, have already declared bankruptcy. Though California law requires local governments to enter into talks with creditors to avert bankruptcy, municipalities can bypass that requirement by declaring a fiscal emergency prior to filing for bankruptcy. In fact, San Bernardino, which filed for bankruptcy on August 1, followed the same strategy to evade prolonged discussions with its creditors.

Atwater municipal funds were hit hard after the housing market went bust and property tax revenue dried up. Furloughs, layoffs, and a freeze on hiring were insufficient for Atwater to revive its economy and fix a current budget gap of $3 million.

Without seeking any innovative method, Atwater city officials are focused on battling losses by time-honored tactics of raising rates for municipal services on a populace already exhausted by the long recession. They are trying to raise rates for essential services like providing water and garbage collection, while at the same time reducing  the proportion of services, trying to eke out a profit from in between the principles of ‘charge more’ and ‘give less.’

  
What
Where


In a telephone interview with Reuters, Union representative Nancy Vinson said, “I believe they’re heading straight to bankruptcy.” She also mentioned at least 38 non-safety municipal employees of Atwater have received layoff notices, and about 12 are clearly marked for termination.

Cities in California going for bankruptcy seem to be following the prior declaration of fiscal emergency strategy after Stockton, the first city to go bankrupt, only worsened its situation over a period of 90 days, by trying to reach a settlement with its creditors. In contrast, San Bernardino, which declared a state of fiscal emergency after preliminary talks with creditors failed, made a smoother bankruptcy application.

Mammoth Lakes, which went bankrupt saying it could not survive a $43 million legal award against it, has since reached a settlement with the plaintiff in the concerned case, and may have its bankruptcy case dismissed later this month.

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!






 

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Complex Litigation Attorney with 3-5 years of arbitration experience

USA-FL-Miami

Miami office of our client seeks complex litigation attorney with 3-5 years of law firm experience i...

Apply Now

Senior Business & Commercial Litigation Attorney

USA-CA-Irvine

Irvine office is seeking a business and commercial litigation attorney with 5+ years of experience. ...

Apply Now

Commercial Litigation Attorney with 1-3 years of experience

USA-TX-Dallas

Dallas office of our client seeks litigation attorney with 1-3 years of experience. The candidate wi...

Apply Now

Labor and Employment Attorney with 3-4 years of litigation experience

USA-CA-Los Angeles

Los Angeles office of our client seeks labor and employment attorney with 3-4 years of litigation ex...

Apply Now

RELEVANT JOBS

Estate Planning Paralegal

USA-VA-Williamsburg

ESTATE PLANNING PARALEGAL Full time position in the Williamsburg Office of a regional, multi-o...

Apply now

Legal Assistant / Paralegal

USA-CA-Santa Cruz

Atchison, Barisone & Condotti, APC is a boutique law firm located in downtown Santa Cruz specializin...

Apply now

ERISA Associate

USA-DC-Washington

Mooney, Green, Saindon, Murphy & Welch, PC, a midsize union-side labor law and employee benefits law...

Apply now

Receptionist and Phone Agent for Legal Office

USA-AZ-Phoenix

Job Summary -Receptionist and Telephone Intake Specialist Position Available- At the Law Offic...

Apply now

Most Popular

SEARCH IN ARCHIVE

To Top