By Anne Lawton, includes “The Bankruptcy Code provides that a municipal debtor is insolvent if it is ‘generally not paying its debts as they become due unless such debts are the subject of a bona fide dispute’ or the municipal debtor is ‘unable to pay its debts as they become due.’ Courts consider the first alternative of the Code’s definition—general nonpayment of debts—to be a measure of current insolvency. The second alternative—inability to pay as debts become due—is forward looking and ‘looks to future inability to pay.’ …”
Read the full article on: Michigan State Law Review