OT: Estimated state budget deficit reaches $25.4 billion

[LuckyInOC]

A little more cut & paste…

PLAN INFORMATION
The plan administered by CalPERS is a “governmental plan” as defined in section 414(d) of the Internal Revenue Code of 1986, and is not subject to the provisions of section 414(p) of the Internal Revenue Code and section 206(d) of ERISA which govern “qualified domestic relations orders.” The terms of the plan are set forth in the California Public Employees’ Retirement Law (“PERL”), which can be found at section 20000, et seq., of the California Government Code.

https://www.calpers.ca.gov/mss-publication/pdf/xZqTtb8H0u1eP_cp_model_order_package_042808%20(2).pdf

I would think that California could declare bankruptcy in regards to pensions and bonds under Chapter 9.

This should do it… Game, Set, Match…

Lucky In OC

[LuckyInOC]

One last thing…

A ‘Governmental unit’ includes a State….

(27) The term “governmental unit” means United States; State; Commonwealth; District; Territory; municipality; foreign state; department, agency, or instrumentality of the United States (but not a United States trustee while serving as a trustee in a case under this title), a State, a Commonwealth, a District, a Territory, a municipality, or a foreign state; or other foreign or domestic government.

Therefore, any ‘Governmental unit’ that sell bonds as loan guarantee agreements and pensions subject to the IRS code should be able to file bankruptcy.

Lucky In OC

[LuckyInOC]

One last thing…

A ‘Governmental unit’ includes a State….

(27) The term “governmental unit” means United States; State; Commonwealth; District; Territory; municipality; foreign state; department, agency, or instrumentality of the United States (but not a United States trustee while serving as a trustee in a case under this title), a State, a Commonwealth, a District, a Territory, a municipality, or a foreign state; or other foreign or domestic government.

Therefore, any ‘Governmental unit’ that sell bonds as loan guarantee agreements and pensions subject to the IRS code should be able to file bankruptcy.

Lucky In OC

[LuckyInOC]

One last thing…

A ‘Governmental unit’ includes a State….

(27) The term “governmental unit” means United States; State; Commonwealth; District; Territory; municipality; foreign state; department, agency, or instrumentality of the United States (but not a United States trustee while serving as a trustee in a case under this title), a State, a Commonwealth, a District, a Territory, a municipality, or a foreign state; or other foreign or domestic government.

Therefore, any ‘Governmental unit’ that sell bonds as loan guarantee agreements and pensions subject to the IRS code should be able to file bankruptcy.

Lucky In OC

[LuckyInOC]

One last thing…

A ‘Governmental unit’ includes a State….

(27) The term “governmental unit” means United States; State; Commonwealth; District; Territory; municipality; foreign state; department, agency, or instrumentality of the United States (but not a United States trustee while serving as a trustee in a case under this title), a State, a Commonwealth, a District, a Territory, a municipality, or a foreign state; or other foreign or domestic government.

Therefore, any ‘Governmental unit’ that sell bonds as loan guarantee agreements and pensions subject to the IRS code should be able to file bankruptcy.

Lucky In OC

[LuckyInOC]

One last thing…

A ‘Governmental unit’ includes a State….

(27) The term “governmental unit” means United States; State; Commonwealth; District; Territory; municipality; foreign state; department, agency, or instrumentality of the United States (but not a United States trustee while serving as a trustee in a case under this title), a State, a Commonwealth, a District, a Territory, a municipality, or a foreign state; or other foreign or domestic government.

Therefore, any ‘Governmental unit’ that sell bonds as loan guarantee agreements and pensions subject to the IRS code should be able to file bankruptcy.

Lucky In OC

[Anonymous]

Thanks OC, you are clearly an expert and you’ll be the first person I call if I ever need a bankruptcy attorney.

[quote=flu]Yes, yes. I’m familiar with the CURRENT rules regarding only municipalities’ ability to file for the BK…BUT do you folks really believe that rules aren’t going to change?[/quote]

So the federal government will change the laws in order to allow CA to declare bankruptcy?

Anyway, this is just semantics and legal technicalities. The interesting question is the impact on government function when the state simply cannot borrow more money. The state constitution requires that schools get get priority followed by general-obligation bondholders. So the state is very unlikely to default, since it is required to cut just about everything else before skipping an interest payment.

But I do agree that things will be different.

A few years down the road, when there is simply no money to pay the unsustainable pension obligations, the unions will start filing the lawsuits. They will claim that contract law supersedes the state constitution, and that funding should be taken from schools to pay for their posh retirement lifestyles. It won’t be technically be bankruptcy, but it will be a huge legal mess.

[Anonymous]

Thanks OC, you are clearly an expert and you’ll be the first person I call if I ever need a bankruptcy attorney.

[quote=flu]Yes, yes. I’m familiar with the CURRENT rules regarding only municipalities’ ability to file for the BK…BUT do you folks really believe that rules aren’t going to change?[/quote]

So the federal government will change the laws in order to allow CA to declare bankruptcy?

Anyway, this is just semantics and legal technicalities. The interesting question is the impact on government function when the state simply cannot borrow more money. The state constitution requires that schools get get priority followed by general-obligation bondholders. So the state is very unlikely to default, since it is required to cut just about everything else before skipping an interest payment.

But I do agree that things will be different.

A few years down the road, when there is simply no money to pay the unsustainable pension obligations, the unions will start filing the lawsuits. They will claim that contract law supersedes the state constitution, and that funding should be taken from schools to pay for their posh retirement lifestyles. It won’t be technically be bankruptcy, but it will be a huge legal mess.

[Anonymous]

Thanks OC, you are clearly an expert and you’ll be the first person I call if I ever need a bankruptcy attorney.

[quote=flu]Yes, yes. I’m familiar with the CURRENT rules regarding only municipalities’ ability to file for the BK…BUT do you folks really believe that rules aren’t going to change?[/quote]

So the federal government will change the laws in order to allow CA to declare bankruptcy?

Anyway, this is just semantics and legal technicalities. The interesting question is the impact on government function when the state simply cannot borrow more money. The state constitution requires that schools get get priority followed by general-obligation bondholders. So the state is very unlikely to default, since it is required to cut just about everything else before skipping an interest payment.

But I do agree that things will be different.

A few years down the road, when there is simply no money to pay the unsustainable pension obligations, the unions will start filing the lawsuits. They will claim that contract law supersedes the state constitution, and that funding should be taken from schools to pay for their posh retirement lifestyles. It won’t be technically be bankruptcy, but it will be a huge legal mess.

[Anonymous]

Thanks OC, you are clearly an expert and you’ll be the first person I call if I ever need a bankruptcy attorney.

[quote=flu]Yes, yes. I’m familiar with the CURRENT rules regarding only municipalities’ ability to file for the BK…BUT do you folks really believe that rules aren’t going to change?[/quote]

So the federal government will change the laws in order to allow CA to declare bankruptcy?

Anyway, this is just semantics and legal technicalities. The interesting question is the impact on government function when the state simply cannot borrow more money. The state constitution requires that schools get get priority followed by general-obligation bondholders. So the state is very unlikely to default, since it is required to cut just about everything else before skipping an interest payment.

But I do agree that things will be different.

A few years down the road, when there is simply no money to pay the unsustainable pension obligations, the unions will start filing the lawsuits. They will claim that contract law supersedes the state constitution, and that funding should be taken from schools to pay for their posh retirement lifestyles. It won’t be technically be bankruptcy, but it will be a huge legal mess.

[Anonymous]

Thanks OC, you are clearly an expert and you’ll be the first person I call if I ever need a bankruptcy attorney.

[quote=flu]Yes, yes. I’m familiar with the CURRENT rules regarding only municipalities’ ability to file for the BK…BUT do you folks really believe that rules aren’t going to change?[/quote]

So the federal government will change the laws in order to allow CA to declare bankruptcy?

Anyway, this is just semantics and legal technicalities. The interesting question is the impact on government function when the state simply cannot borrow more money. The state constitution requires that schools get get priority followed by general-obligation bondholders. So the state is very unlikely to default, since it is required to cut just about everything else before skipping an interest payment.

But I do agree that things will be different.

A few years down the road, when there is simply no money to pay the unsustainable pension obligations, the unions will start filing the lawsuits. They will claim that contract law supersedes the state constitution, and that funding should be taken from schools to pay for their posh retirement lifestyles. It won’t be technically be bankruptcy, but it will be a huge legal mess.

[davelj]

[quote=BigGovernmentIsGood]
Good lord. You conservatives never cease to amaze me with your ignorance. Please stop watching FoxNews, Rush Limbaugh, Glen Beck and other conservative sources that are making you more retarded by the day and learn to read fact-based news sources like Slate and HuffingtonPost.

From Slate:

Can a state declare bankruptcy? Can a country?

No and no. Chapter 9 of the U.S. bankruptcy code allows individuals and municipalities (cities, towns, villages, etc.) to declare bankruptcy. But that doesn’t include states. (The statute defines “municipality” as a “political subdivision or public agency or instrumentality of a State”—that is, not a state itself.) For one thing, states are said to have sovereign immunity, as protected by the 11th Amendment, which means they can’t be sued. In other words, they don’t need any protection from angry creditors who would take them to court for failing to pay their debts. As a result, states can simply borrow money ad infinitum.

Say the state can’t make its debt payments, and no one will lend it any more money. In that case, the federal government can step in and put the state into receivership. This would involve the assignment of an accountant to manage the state’s debt, overseen by a judge. It would be a lot like bankruptcy, except instead of following a structured set of steps—informing creditors, appointing creditors’ committees, a 120-day window to file a plan, etc.—a receiver has the authority to force creditors to renegotiate loans in a speedy fashion. However, the accountant in charge would not have the power to make decisions about the state’s budget, such as which programs needed to be cut and which taxes had to be raised. (No state has ever gone into receivership.)

http://www.slate.com/id/2246915/
[/quote]

Let’s assume for a moment that a state can’t declare bankruptcy – or, more specifically, let’s assume that California can’t declare bankruptcy. Just for argument’s sake, of course, so that there won’t be some great debate over the technical legalities.

The article above – assuming it’s correct – clearly states that “receivership” is “a lot like bankruptcy,” but for some technical and procedural differences.

So the bottom line appears to be that California can end up in a state of affairs – “receivership” – which is, for all intents and purposes, “a lot like bankruptcy.” Consequently, bankruptcy and receivership in the context of the State of California are distinctions without significant differences. To the layperson they look pretty much the same from the outside.

Bankruptcy law is legislated at the federal level. With the exception of cases involving federal entities (e.g., banks via FDIC), most receivership law is legislated at the state level. But, trust me, whether an entity is in receivership or bankruptcy – it’s up shit creek. Debating the difference between the two is like arguing about whether you’d rather have your right leg or left leg amputated. They’re both unpleasant.

[davelj]

[quote=BigGovernmentIsGood]
Good lord. You conservatives never cease to amaze me with your ignorance. Please stop watching FoxNews, Rush Limbaugh, Glen Beck and other conservative sources that are making you more retarded by the day and learn to read fact-based news sources like Slate and HuffingtonPost.

From Slate:

Can a state declare bankruptcy? Can a country?

No and no. Chapter 9 of the U.S. bankruptcy code allows individuals and municipalities (cities, towns, villages, etc.) to declare bankruptcy. But that doesn’t include states. (The statute defines “municipality” as a “political subdivision or public agency or instrumentality of a State”—that is, not a state itself.) For one thing, states are said to have sovereign immunity, as protected by the 11th Amendment, which means they can’t be sued. In other words, they don’t need any protection from angry creditors who would take them to court for failing to pay their debts. As a result, states can simply borrow money ad infinitum.

Say the state can’t make its debt payments, and no one will lend it any more money. In that case, the federal government can step in and put the state into receivership. This would involve the assignment of an accountant to manage the state’s debt, overseen by a judge. It would be a lot like bankruptcy, except instead of following a structured set of steps—informing creditors, appointing creditors’ committees, a 120-day window to file a plan, etc.—a receiver has the authority to force creditors to renegotiate loans in a speedy fashion. However, the accountant in charge would not have the power to make decisions about the state’s budget, such as which programs needed to be cut and which taxes had to be raised. (No state has ever gone into receivership.)

http://www.slate.com/id/2246915/
[/quote]

Let’s assume for a moment that a state can’t declare bankruptcy – or, more specifically, let’s assume that California can’t declare bankruptcy. Just for argument’s sake, of course, so that there won’t be some great debate over the technical legalities.

The article above – assuming it’s correct – clearly states that “receivership” is “a lot like bankruptcy,” but for some technical and procedural differences.

So the bottom line appears to be that California can end up in a state of affairs – “receivership” – which is, for all intents and purposes, “a lot like bankruptcy.” Consequently, bankruptcy and receivership in the context of the State of California are distinctions without significant differences. To the layperson they look pretty much the same from the outside.

Bankruptcy law is legislated at the federal level. With the exception of cases involving federal entities (e.g., banks via FDIC), most receivership law is legislated at the state level. But, trust me, whether an entity is in receivership or bankruptcy – it’s up shit creek. Debating the difference between the two is like arguing about whether you’d rather have your right leg or left leg amputated. They’re both unpleasant.

[davelj]

[quote=BigGovernmentIsGood]
Good lord. You conservatives never cease to amaze me with your ignorance. Please stop watching FoxNews, Rush Limbaugh, Glen Beck and other conservative sources that are making you more retarded by the day and learn to read fact-based news sources like Slate and HuffingtonPost.

From Slate:

Can a state declare bankruptcy? Can a country?

No and no. Chapter 9 of the U.S. bankruptcy code allows individuals and municipalities (cities, towns, villages, etc.) to declare bankruptcy. But that doesn’t include states. (The statute defines “municipality” as a “political subdivision or public agency or instrumentality of a State”—that is, not a state itself.) For one thing, states are said to have sovereign immunity, as protected by the 11th Amendment, which means they can’t be sued. In other words, they don’t need any protection from angry creditors who would take them to court for failing to pay their debts. As a result, states can simply borrow money ad infinitum.

Say the state can’t make its debt payments, and no one will lend it any more money. In that case, the federal government can step in and put the state into receivership. This would involve the assignment of an accountant to manage the state’s debt, overseen by a judge. It would be a lot like bankruptcy, except instead of following a structured set of steps—informing creditors, appointing creditors’ committees, a 120-day window to file a plan, etc.—a receiver has the authority to force creditors to renegotiate loans in a speedy fashion. However, the accountant in charge would not have the power to make decisions about the state’s budget, such as which programs needed to be cut and which taxes had to be raised. (No state has ever gone into receivership.)

http://www.slate.com/id/2246915/
[/quote]

Let’s assume for a moment that a state can’t declare bankruptcy – or, more specifically, let’s assume that California can’t declare bankruptcy. Just for argument’s sake, of course, so that there won’t be some great debate over the technical legalities.

The article above – assuming it’s correct – clearly states that “receivership” is “a lot like bankruptcy,” but for some technical and procedural differences.

So the bottom line appears to be that California can end up in a state of affairs – “receivership” – which is, for all intents and purposes, “a lot like bankruptcy.” Consequently, bankruptcy and receivership in the context of the State of California are distinctions without significant differences. To the layperson they look pretty much the same from the outside.

Bankruptcy law is legislated at the federal level. With the exception of cases involving federal entities (e.g., banks via FDIC), most receivership law is legislated at the state level. But, trust me, whether an entity is in receivership or bankruptcy – it’s up shit creek. Debating the difference between the two is like arguing about whether you’d rather have your right leg or left leg amputated. They’re both unpleasant.

[davelj]

[quote=BigGovernmentIsGood]
Good lord. You conservatives never cease to amaze me with your ignorance. Please stop watching FoxNews, Rush Limbaugh, Glen Beck and other conservative sources that are making you more retarded by the day and learn to read fact-based news sources like Slate and HuffingtonPost.

From Slate:

Can a state declare bankruptcy? Can a country?

No and no. Chapter 9 of the U.S. bankruptcy code allows individuals and municipalities (cities, towns, villages, etc.) to declare bankruptcy. But that doesn’t include states. (The statute defines “municipality” as a “political subdivision or public agency or instrumentality of a State”—that is, not a state itself.) For one thing, states are said to have sovereign immunity, as protected by the 11th Amendment, which means they can’t be sued. In other words, they don’t need any protection from angry creditors who would take them to court for failing to pay their debts. As a result, states can simply borrow money ad infinitum.

Say the state can’t make its debt payments, and no one will lend it any more money. In that case, the federal government can step in and put the state into receivership. This would involve the assignment of an accountant to manage the state’s debt, overseen by a judge. It would be a lot like bankruptcy, except instead of following a structured set of steps—informing creditors, appointing creditors’ committees, a 120-day window to file a plan, etc.—a receiver has the authority to force creditors to renegotiate loans in a speedy fashion. However, the accountant in charge would not have the power to make decisions about the state’s budget, such as which programs needed to be cut and which taxes had to be raised. (No state has ever gone into receivership.)

http://www.slate.com/id/2246915/
[/quote]

Let’s assume for a moment that a state can’t declare bankruptcy – or, more specifically, let’s assume that California can’t declare bankruptcy. Just for argument’s sake, of course, so that there won’t be some great debate over the technical legalities.

The article above – assuming it’s correct – clearly states that “receivership” is “a lot like bankruptcy,” but for some technical and procedural differences.

So the bottom line appears to be that California can end up in a state of affairs – “receivership” – which is, for all intents and purposes, “a lot like bankruptcy.” Consequently, bankruptcy and receivership in the context of the State of California are distinctions without significant differences. To the layperson they look pretty much the same from the outside.

Bankruptcy law is legislated at the federal level. With the exception of cases involving federal entities (e.g., banks via FDIC), most receivership law is legislated at the state level. But, trust me, whether an entity is in receivership or bankruptcy – it’s up shit creek. Debating the difference between the two is like arguing about whether you’d rather have your right leg or left leg amputated. They’re both unpleasant.

[Author]

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