July 6, 2017

Strapped Hartford hires bankruptcy adviser

HBJ Photo | Matt Pilon
HBJ Photo | Matt Pilon
Mayor Luke Bronin.

The cash-strapped city of Hartford, which is facing insolvency, says it has hired a bankruptcy law firm experienced in helping ailing municipalities restructure to assist the city in charting a "sustainable path.

Mayor Luke Bronin announced Thursday that law firm Greenberg Traurig LLP, an international firm headquartered in Miami and with New York City offices, will team with the city in pursuing a full range of restructuring options to ensure its long-term fiscal stability.

Nancy A. Mitchell, a co-chair of the firm's restructuring practice who has more than 30 years of experience in restructuring and corporate finance, will lead the Greenberg Traurig team.

Financial terms and the length of the law firm's engagement were not disclosed Thursday.

In the wake of the state's unsettled budget and finances, the Capital City is grappling with daily operating and legacy costs, such as city-worker retirements and benefits, amid property-tax collections that in recent years have not kept pace with the city's annual outlays.

Among the city's options are a financial bailout from the state, a prospect made difficult by the state's fiscal woes, or a rare Chapter 9 municipal bankruptcy filing, which also must be approved by the state. Another path, which the city has already tapped, may involve closing or shedding city assets, or negotiating with the city's debtors to either forgive some of it or accept revised terms and timetables for repayment.

"Nancy Mitchell and the team at Greenberg Traurig have extensive experience in municipal restructuring, and they will be working with us to examine all options for putting the city of Hartford on a sustainable path," Bronin said in a statement.

"Over the past 18 months, we have made significant cuts and we continue to pursue aggressive changes in our labor contracts. We have also advocated for a state budget that puts our cities in a position to be strong and vibrant, for the sake of Connecticut's economic competitiveness," he said. "We will continue to work closely with our legislators as they work to adopt a responsible state budget. In the meantime, as we start a new fiscal year without a state budget and with significant uncertainty, we will have the advice and counsel of an experienced and highly respected restructuring firm."

City Treasurer Adam Cloud and City Council President Thomas "T.J." Clarke II said they support the hiring.

"Given the fiscal issues facing our state and the fiscal cliff facing our city, we certainly understand the mayor's administrative decision to engage municipal restructuring experts," said Clarke.

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