Date: May 19, 2015
Time: 10:00 am – 12:00 pm
Where: Webinar
REGISTER HERE
Despite their obvious differences, sovereign countries and large US cities share some common characteristics. They are both responsible for the provision of basic services like water and sanitation, public safety, education and transportation; they employ public workers; invest in critical infrastructure and decide on important social and economic policies. Both aspire to grow and improve the livelihoods of their citizens. Both rely on tax collection to fund most expenditures, and when tax revenue is not enough, both countries and cities can seek external financing through private capital markets (using bonds or other instruments). Countries and cities are equally responsible for repaying their creditors – with the same incentives to do so (i.e. to keep borrowing costs low). In the event that debt becomes unsustainable, both will need to restructure or adjust their debt. However, this is where the similarities end. US Cities have a predictable, transparent and legitimate process to restructure debt (called “Chapter 9” in the US). Countries do not.
Detroit is the most recent case of municipal debt restructuring in the United States. In 2013, when the city determined that it was financially insolvent, it sought to negotiate “haircuts” with its creditors as well as with unions and pension boards. When this approach failed, Detroit was forced to file for bankruptcy under Chapter 9, becoming the largest municipal bankruptcy in US history ($18.5 billion USD).
What lessons can we learn from Detroit’s experience, and the municipal debt restructuring process in general? Are these lessons applicable or relevant for sovereign debt workouts?
Join us for an open dialogue on this topic.
We will have two experts on this issue present and lead this discussion:
Mr. Kunibert Raffer
Kunibert Raffer is an Associate Professor at the Department of Economics, University of Vienna (Austria), Honorary Professor of the Universidad Nacional de Rio Negro (Argentina), and a member of the Study Group on Sovereign Insolvency of the International Law Association. The Raffer Proposal (adapting US Chapter 9 insolvency to sovereigns) has been propagated globally by NGOs under the name Fair, Transparent Arbitration Process (FTAP).
Mr. James E. Spiotto
James Spiotto is a Retired Partner of the law firm of Chapman and Cutler LLP and presently is the Managing Director of Chapman Strategic Advisors LLC, the consulting subsidiary of that law firm. He also is co-owner and co-publisher of MuniNetGuide.com, an online resource specializing in municipal-related research and information concerning state and local government, including public finance, infrastructure, job market data and economic statistics and analysis. Mr. Spiotto has 40 years of experience representing issuers, indenture trustees, bondholders, banks, insurance companies, institutional investors and funds in litigation, bankruptcy or workouts of more than 400 troubled debt financings in more than 35 different states and in foreign countries as well.
Mr. Spiotto has testified before the United States Congress related to amendments to the Bankruptcy Code. He was awarded the National Federation of Municipal Analysts Municipal Industry Award in 2014 (and 1992) and the National Association of Bond Lawyers Carlson Prize in 1993. He has written numerous books and articles on municipal finance, default and bankruptcy.
Please direct any questions to Nathan Coplin at This e-mail address is being protected from spambots. You need JavaScript enabled to view it
