II. ELIGIBILITY UNDER CHAPTER 9
A. Requirements for Filing
Pursuant to Section 109(c), to qualify for relief under Chapter 9, an entity must be:
(1) a municipality;
(2) insolvent;
(3) "specifically authorized, in its capacity as a municipality or by name, to be a debtor under such chapter by State law, or by a governmental officer or organization empowered by State law to authorize such entity to be a debtor under such chapter";
(4) "desire to effect a plan to adjust such debts"; and
(5) either:
(a) has obtained the agreement of creditors holding at least a majority in amount of claims of each class that such entity intends to impair under a plan;
(b) has negotiated in good faith with creditors and has failed to obtain the agreement of creditors holding at least a majority in amount if the claims of each class that such entity intends to impair under a plan;
(c) is unable to negotiate with creditors because such negotiation is impracticable; or
(d) reasonably believes that a creditor may attempt to obtain a transfer that is avoidable under Section 547.
Creditors may object to a municipality's eligibility to file bankruptcy if it fails to meet these requirements. If an objection is filed, the bankruptcy court must hold a hearing to determine whether the municipality is eligible for Chapter 9.
1. Municipality
Relief under Chapter 9...
