RI city's bankruptcy case begins in federal court

AP News
Posted: Aug 03, 2011 1:03 PM
RI city's bankruptcy case begins in federal court

The state-appointed receiver overseeing a cash-strapped Rhode Island city is making the case for municipal bankruptcy and offering a glimpse of its planned way out.

Theodore Orson, attorney for the receiver of Central Falls, told a federal judge Wednesday says he wants to file a "consensual" recovery plan to the court within 30 days, agreed to by municipal workers and retirees. But he also challenged those groups to offer their own plan.

Receiver Robert G. Flanders filed for bankruptcy Monday on behalf of the city. He has asked the court to void the city's collective bargaining agreements and employment contracts.

Flanders has said he would like the bankruptcy to be over within six months but it could take much longer if retirees and union members fight cuts in court.