A bill to amend the Bankruptcy Act to add a new chapter thereto providing for the adjustment of the debts of major municipalities.

Summary

Provides that any municipality with a population in excess of one million inhabitants is eligible to file a petition for relief under this Act, if first authorized by the State, for the adjustment of the indebtedness of such municipality by a court of bankruptcy. States that a petition shall be insufficient to involve jurisdiction of the court unless accompanied by a plan made in good faith for the composition or extension of debts and a statement of petitioner's current and projected revenues and expenditures adequate to establish that the budget of petitioner will be in balance within a reasonable time after adoption of the plan. Provides for notice of the provisions of such plan to the State, the Securities and Exchange Commission and creditors or others who may be materially and adversely affected by the plan. Sets forth the priorities with respect to payment of debts in advance of any distribution to creditors in the settlement of obligations under this Act. Provides for a hearing for all interested parties on the confirmation of the plan. States that a plan of composition or extension may be confirmed only if, of the creditors voting in writing to accept or reject the plan, those holding two-thirds in amount of each class materially and adversely affected have voted to accept. Provides that no such acceptance shall be required from any class which, under the plan, is to be paid in cash the value of its claims or is to be afforded such method of protection as will, consistent with the circumstances of the particular case, equitably and fairly provide for the realization of the value of its claims. Prescribes the findings to be made by the judge in entering a decree confirming the plan.

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Documents

2 official files

• Reported to Senate with amendment(s)

  summary · EN · 18 November 1975

  Open at official source

• Introduced in Senate

  summary · EN · 30 October 1975

  Open at official source

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