Central Falls, RI: National Model or One-Off?

Central Falls, R.I., exited from bankruptcy in a mere 13 months. Whether Judge Frank Bailey’s assertion last week in Providence that the 19,000-population city’s reorganization could serve as a national model remains an open question. California is home to three communities that filed for bankruptcy over a two-week span this summer: Stockton, Mammoth Lakes and San Bernardino.Vallejo, Calif., which filed bankruptcy in 2008, took more than three years to emerge from Chapter 9.  Central Falls exits Chapter 9 with a six-year plan, fiscal 2012 included, that includes balanced budgets. Cuts were painful – retired police officers and firefighters saw their pension benefits cut 55%. Bondholders remained whole and the city has made its bond payments on time. Bailey, assigned to the case from the Boston bankruptcy court, drew widespread praise for his brisk handling of the case.

Bond Buyer


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