A New Fulcrum Point for City Survival

78 Pages Posted: 18 Mar 2015 Last revised: 7 Nov 2015

See all articles by Samir D. Parikh

Samir D. Parikh

Lewis & Clark Law School; Fulbright Schuman Scholar; Bloomberg Law; Fulbright Commission

Date Written: June 1, 2014

Abstract

Municipalities have historically enjoyed immense stability. This era of tranquility is over, and fiscal deterioration is accelerating. Policymakers and scholars have struggled to formulate debt restructuring options; almost all have embraced federal bankruptcy law. But this resource-draining process is not the fulcrum point for any meaningful solution to municipal demise. Indeed, for the vast majority of distressed municipalities, the lever of municipal recovery will not turn based on the solutions that have to date been offered. This Article radically shifts the municipal recovery debate by arguing that state law is the centralized point at which officials can exert the necessary amount of pressure to gain concessions from key creditor constituencies. To that end, I propose a comprehensive, fiscal monitoring system that identifies and then directs distressed municipalities into a dynamic negotiation model designed to restructure inveterate debt obligations. Animating this proposal is a more nuanced understanding of the Contracts Clause that allows a municipality to explore unilateral contract modification in an effort to facilitate consensual agreements with creditor constituencies.

Suggested Citation

Parikh, Samir D., A New Fulcrum Point for City Survival (June 1, 2014). 57 William & Mary Law Review 212 (2015) , Available at SSRN: https://ssrn.com/abstract=2579837

Samir D. Parikh (Contact Author)

Lewis & Clark Law School ( email )

10015 S.W. Terwilliger Blvd.
Portland, OR 97219
United States

Fulbright Schuman Scholar ( email )

United States

Bloomberg Law ( email )

New York
New York, NY
United States

Fulbright Commission ( email )

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