Community Chat

[pinkskates4]

The state-appointed receiver overseeing the cash-strapped Rhode Island town of Central Falls is filing for bankruptcy on the city's behalf in an effort to help it get back on its financial feet.

Receiver Robert G. Flanders announced the step at City Hall on Monday. He was joined by Gov. Lincoln Chafee (CHAY'-fee) who says the move is needed to address Central Fall's "dire" finances.

Flanders had earlier indicated that filing for Chapter 9 bankruptcy protection in federal court might be the only option unless municipal retirees and city workers made major voluntary concessions. Flanders has no power to impose cuts, but officials say a bankruptcy judge could order pensions modified and union contracts voided.

The city has $80 million in unfunded pension and benefits obligations and $5 million deficits projected for each of the next five years.

http://www.businessweek.com/ap/financialnews/D9ORBF4O0.htm

Just saw a spokesperson for the city on MSNBC who, when asked if pensioners would get paid, at first dodged the question and then finally said it was possible they would have to take a 50% or more cut in their pensions. She said it was "unfortunate."

Note that the Governor pushing this is an Independent (he left the R party) who supported BO's election.