The small city of Fairfield, Alabama is set to file for Chapter 9 Bankruptcy, which is quite rare, especially for a municipality of merely 12,000 residents. Prior to the pandemic, Mayor Eddie J. Penny stated that the city had drained all its funding and exhausted alternatives to bankruptcy. Since the start of COVID, the city profits have depleted even further, forcing the hand of the city into bankruptcy proceedings. Liabilities in Fairfield are reported as high at $10 million and roughly 20% of its residents are currently living under the poverty line.
Chapter 9 bankruptcy is unique to municipalities and does not force liquidation of any assets. Public employees, as such, should not fear for their job as the city does not expect to lay off any workers.
Considering bankruptcy? Contact our office at 816-524-4949 to set up a consultation or visit our website at hoorfarlaw.com.