Comments on: The Notorious C.I.B.

By: Robert - NW Side

Robert - NW Side — Mon, 20 Apr 2009 23:27:00 +0000

“Chapter 9 lets municipalities file for bankruptcy if there is a provision in state law that allows them to. There is no provision in Indiana Code to do that.” — Abdul at 28
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“Under the U.S. Constitution, the federal government enjoys the exclusive power to promulgate bankruptcy laws. U.S. Const., art. I, 8. “Because bankruptcy law is federal law, enacted pursuant to the constitutional grant of bankruptcy power, it preempts state law . . .pursuant to the supremacy clause . . . .” Renges, Inc. v. PAC Financial Corp., (1987), Ind.App., 515 N.E.2d 563, 566 (quoting In Re Safren, 65 B.R. 566, 573 (Bankr. C.D. Cal. 1986))” — Joseph Hammes, Trustee O v. Jennifer Brumley, Supreme Court No. 49S02-9512-CV-1382, 30 Dec 1995
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Regardless if there is a state statute ‘allowing’ for a unit of government to file bankruptcy, it appears that federal law preempts any state statute, or lack thereof.
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Besides, since no state statute exists explicitly DENYING a unit of government to file, that doesn’t mean that it is prohibited either.

By: Wayne Kirk

Wayne Kirk — Mon, 20 Apr 2009 16:46:39 +0000

Oops…I meant to write the stock ticker is: FAZ

By: Wayne Kirk

Wayne Kirk — Mon, 20 Apr 2009 16:45:54 +0000

12:42 Stock Market update.
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(Again, I am not a licensed securities trader and my ideas should not be treated as a professional–please seek professional advice before making a trade)
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Before the market opened, I placed a market order for FAX (Financial Bull 3X Index Stock) and once the market opened, the price was at $9.95 per share. Currently, the stock is at $10.73 per share and rising.
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Also, for those who like to see a visual picture of the major players in the marketplace, please click on the following website: http://finviz.com/map.ashx?t=sec

By: Paul K. Ogden

Paul K. Ogden — Mon, 20 Apr 2009 16:32:22 +0000

The Real Deal,

Pat Early is the son of former Republican State Chairman, Rex Early. I’m pretty sure he’s not a Democrat. This CIB mess was a Republican and Democrat screw up.

By: Paul K. Ogden

Paul K. Ogden — Mon, 20 Apr 2009 16:26:20 +0000

Abdul, thanks for the info.

I think I said in one of my posts, that given the language of Chapter 9, the legislature may well have to specifically give the CIB the authority to file bankrutpcy, if it is not already in the CIB’s general grant of power, which I haven’t looked at lately. That though only involves inserting the authorization in a bill in conference or passing a simple resolution – an easy fix while the legislature is in session. Even if the legislature adjourned, you could reconvene the legislature for one day to pass a bankrtupcy authorization.

When you made your comment, I thought maybe there was a specific prohibition on muncipal entities filing BK. That would be a much more difficult thing to overturn than simply getting a bankruptcy authorization for the CIB.

By: Abdul Hakim-Shabazz

Abdul Hakim-Shabazz — Mon, 20 Apr 2009 16:11:08 +0000

Paul,

Chapter 9 lets municipalities file for bankruptcy if there is a provision in state law that allows them to. There is no provision in Indiana Code to do that. I’ve confirmed this with a couple different reliable sources who could not find it either. If you know where it is in state law, please show it to me.

By: Paul K. Ogden

Paul K. Ogden — Mon, 20 Apr 2009 16:06:59 +0000

Abdul,

Please point to the law that says that. I think you’re probably misinterpreting the law. There is no state law that I know of prohibiting mucnipal entities from filing bankrutpcy. Such a law would be idiotic since the BK code expressly clearly allows it.

By: Shorebreak

Shorebreak — Mon, 20 Apr 2009 14:55:17 +0000

It sounds to me as though there are three choices:
- cover the shortfall 100% with tax increases
- cover it with a mixture of tax increases and private contributions
- or cover it 100% with private contributions.
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As much as I despise taxes of any sort (label me an extremist, but I’d almost rather live like the Amish than to have my money taken by irresponsible government by decree), I believe that there needs to be a compromise here. The compromise needs to be 100% linear, and it needs to involve retro-active contributions from private beneficiaries if the payment structure hasn’t been linear in years past.
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For example – open the books to CIB and all private parties who have been involved in CIB finance dealings. Look at the cost/return margins for private organizations vs public coffers. Align all CIB bailouts with the profit ratio that is equivalent to private:public and include terms assuring that private recipients make good on prior disparities – going back at least seven years.
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Also, if during the course of audits it becomes apparent that there is a disparity in the ratio between public:private profits, let the arrangement state that involved parties will be investigated and convicted if any influence peddling is involved. Those who want to avoid prosecution may begin contacting the AG and/or prosecutor as soon as today to work out a plea arrangement.
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It seems as though this mess is too deep to wade out of without some sort of compromise. But – make the compromise eqiuivalent in nature to the public/private profit ratio, make the audit process a formal/public effort, and hold any wrongdoers 100% accountable for any suspected and/or obvious disparities that benefit private parties with the use of public monies.

By: Nick

Nick — Mon, 20 Apr 2009 14:28:15 +0000

Call it want you want, but CIB will be in default on its bond obligations by the end of this month without any meaningful concession from the Colts or Pacers, cash infusion or loan.

They are projected to be insolvent sometime between June and September.

By: Abdul Hakim-Shabazz

Abdul Hakim-Shabazz — Mon, 20 Apr 2009 14:17:08 +0000

Bankruptcy is *NOT* an option. State law doesn’t allow units of local government to file for bankruptcy. And that isn’t going to happen in the next 10 days. How many times do I have to tell people this?