Significantly, it was the first municipality in California to file for bankruptcy since Orange County did so in 1994.Ĩ. 16,582) with mineral water springs, 41 spas, and 330 days of sunshine a year, Desert Hot Springs was $8 million in debt when it filed for bankruptcy in 2000. Desert Hot Springs, CA – Despite being a glamorous resort city (pop. Unfortunately, the financial restructuring involved massive cutbacks, including closing a community center, reducing library funds, laying off city workers, and greatly reducing pension payments.ħ. Once home to a thriving textile industry, the city was forced to close 11 textile plants between 19. 19,376) may be the smallest city in Rhode Island, but it is still one of the biggest municipalities ever to declare bankruptcy when it did so in 2011. After pensioners sued the city, officials declared Chapter 9 bankruptcy.Ħ. (The first was in 1999.) Though the city was once a thriving municipality in the 1960s, population decline and a smaller middle class caused the city’s pension plan to completely exhaust itself. Prichard, AL – Prichard declared bankruptcy for the second time in 2009. A federal court declared the move illegal, however, because while the city council approved the move, the mayor did not.ĥ. After making the repairs, the city found itself $317 million in debt. 49,528) declared bankruptcy in 2011, largely because its grossly outdated trash incinerator required extensive repairs. Unfortunately, the city lost another $8 million in legal fees while filing for bankruptcy.Ĥ. By 2005-2006, the city was running deficits in excess of $3-4 million over its annual income. 115,942) was the largest California city ever to declare bankruptcy when it did so in 2008. Vallejo, CA – Before Stockton made the same move, Vallejo (pop. The move was made largely so that Bridgeport could renegotiate labor contracts that put a huge financial strain on the city.ģ. 141,686) made history by being the first major city to take this course of action. Bridgeport, CT – Unlike many of the cities on this list, Bridgeport declared bankruptcy well before the recession in 2008. The city based its spending, salaries, and borrowing on growing developer fees and property taxes, but when the housing market went bust, the city’s financial situation quickly spiraled out of control.Ģ. 291,707) was the largest American city to go bankrupt.
Stockton, CA – Until Detroit declared bankruptcy, Stockton (pop. Here is a list of the 10 most notable American cities to declare bankruptcy.ġ. As of June 2012, more than 600 cities, towns, and counties had done the same since the procedure first became legal for municipalities in the 1930s. Detroit has made headlines because it is the largest American city to declare bankruptcy, but it is far from the only municipality to do so. But while declaring bankruptcy is certainly an unusual move for a city, it is not an unprecedented one. Disputes are ongoing as to whether the declaration is in keeping with the Michigan State Constitution, while business analysts have applauded the move, saying it is necessary for Detroit’s fiscal recovery. The legal, political, and financial world is abuzz with the news that Detroit has declared bankruptcy. Top 5 Questions and Answers About the Camp Lejeune Lawsuits.
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