Bankruptcy offers few easy answers for counties

Filed under: AM Roundup |

Municipal bankruptcies are still rare, and the practice will remain rare because federal law prohibits the amount of influence a bankruptcy judge can have in municipal affairs.

The latest municipal bankruptcy, Jefferson County, Ala., was caused by fraud by an elected official. But the New York Times is reporting that bankruptcy doesn’t allow the judge to control the county’s affairs, just “act as a referee.”

Read more at the New York Times.