The Chicago Sun-Times reports:
U.S. bankruptcy law requires government entities to obtain specific authorization from the state to file for Chapter 9, but there’s no provision in Illinois to grant that authority to local governments, so technically filings aren’t permitted.
There's more:
A pair of downstate towns successfully reorganized in the last decade, even though the municipalities didn’t receive the required authorization from the state. The Chapter 9 cases probably proceeded, bankruptcy experts tell the BGA, because no one challenged the filing petitions.
The towns are small with relatively limited assets and debts, so major financial reorganizations weren’t necessary.
The amazing Blue state of Illinois!!
