By John Galt
August 1, 2011
And another one bites the dust.
From Fox Business Channel:
Rhode Island City Files For Bankruptcy;Cites Labor Costs
By Kelly Nolan
Published August 01, 2011
Dow Jones Newswires
–State-appointed receiver immediately reduces health benefits
–Receiver also seeks court permission to void union contracts
–State law protects general-obligation bondholders from default
(Adds details on bankruptcy and comments from state-appointed receiver in first-fifth paragraphs; adds no market reaction details and analyst comments in 11th and 12th paragraphs; and details on local government bankruptcies filings in 14th paragraph.)
Central Falls, R.I., filed for bankruptcy Monday, becoming only the second local government in the country to seek protection in the courts this year. The move came after a state-appointed receiver was unable to negotiate significant concessions from unions representing police officers, firefighters and other city workers.
The receiver, Robert G. Flanders, said that in order to get “immediate savings” he was seeking federal court authority to reject collective bargaining agreements with the city’s employees. He also said Central Falls would immediately raise deductibles and co-payments for health-care plans covering city employees and retirees.
“Everything was done to avoid this day,” Flanders said in a statement. Taxes were raised “to the maximum level allowable,” negotiations with police and fire unions failed and “we tried in vain to persuade our retirees to accept voluntary reductions in their benefits,” he said.
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Dang, all this hope, change, and anti-Meridith Whitney stuff means this couldn’t possibly have happened in this dimension. Perhaps the headline is from the realm Benjamin Buckaroo Banzai Bernanke hails from……
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