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The ‘quasi-instrumentality’ question: Chapter 9, Chapter 11, or neither?

FEBRUARY 15, 2021 | by Brian Lohan, Maja Zerjal Fink, Jeffrey Messina | BLOOMBERG LAW

By three Arnold & Porter attorneys, includes “Due to travel and gathering restrictions, revenues supporting these quasi-governmental entities have declined, leading to unscheduled draws on reserve accounts to meet debt service obligations—a potential canary in the coal mine? If these entities are municipalities, they may have no option of reorganizing under the Bankruptcy Code in states that have not authorized muncipalities to be Chapter 9 debtors. In such states, the only option is Chapter 11, provided the entity is a ‘person’ under the Bankruptcy Code. …

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