Hartford should consider bankruptcy

John Horak

Write a Comment

By John Horak

There are four words that come to mind when I think about Hartford: sadness, disorder, bankruptcy and leadership. Let me take them one at a time.

First, the sadness is a product of loss — the loss of what we once were. Connecticut historian Bill Hosley put it to me this way recently (these are his words). He said Greater Hartford was the Silicon Valley of its day, the base of the so-called second industrial revolution.

It was a revolution based in precision manufacturing, which produced things — like guns, typewriters, machine tools and eventually automobiles — that were complex and involved assembling multiple minutely-gauged metal parts. For over 100 years, this activity made this region prosperous, welcoming to immigrants lured by work and opportunity, and earning us the brand of a place renowned for technological innovation.

Today we can't get a minor league baseball stadium built; and we look over our shoulders with trepidation as major corporations that were birthed here eye greener pastures elsewhere.

Second, the disorder (in finances and management) is what we see unfolding before our eyes, brought on by failures of the political system — city (and state) government have proven to be incompetent. It is that simple.

Some political scientists posit that over time decline into financial disorder is inevitable in democracies because of the natural accretion of ever larger numbers of “special interest groups,” which vote and lobby government to increase their share of the economic pie at the expense of the whole. Eventually, the pie is too small to feed everyone who expects to be fed.

While this theory seems spot on when it comes to Hartford and the interest groups circling within its financial orbit (residents, businesses, employees, creditors, unions and others), I do not believe decline is inevitable. Moreover, I know there are corrective mechanisms available to the city, which brings me to my third word, bankruptcy.

Bankruptcy is as robust a corrective mechanism as it is radioactive to the interest groups and the politicians. This is because their influence over the Capital City's affairs would be diminished if the city filed, and because the filing could be viewed (at least if not properly planned) as an admission of failure that further damages our already tattered reputation.

I am not a bankruptcy lawyer by training, but I have worked closely enough with two of the best in the state to have learned that a filing is not an invitation to a funeral, but more like hitting the pause button on your remote control, in that it would compel the interests competing for the city's resources to stand down and bring their claims to the bankruptcy court — where they will be sorted out under well-defined rules and the judge's supervision. Most significantly, the judge would not be an elected official whose job and decisions are subject to the pressures of the ballot box or lobbyists (the means by which the affected interest groups would otherwise use to get their way).

Moreover, with enough advanced planning and negotiating, it is possible to go into a bankruptcy with many issues resolved, such that the court proceedings are less of a trial than a cleansing that rinses the financial disorder from the system and paves the way for rebirth if not a renaissance.

Fourth, my final word is leadership, which I am using in a sense broad enough to include concepts such as courage, judgment and respect. In this sense, leadership would give no quarter to the denial that hangs over the city (things really are very bad and getting worse). Leaders have the courage to admit there are times when an outside intervener (such as a bankruptcy judge) is needed to make things right.

My point: A well-honed turnaround plan in which bankruptcy is one element, and that includes a vigorous exit plan (which could include financing commitments and charter amendments) may be the best way to restore Hartford's financial health, reputation and pride. We should embrace and fix our problems, not run from them or diminish ourselves by playing endless rounds of the “blame game.”

Finally, while we have a mayor (Luke Bronin) with the necessary talent and energy, leadership must also come from our private-sector and nonprofit institutions, which have skin in the game and the brain power to provide the mayor and the city what is needed to turn things around. This would, of course, be an arduous task, but the talent and resources are already in place in organizations such as the MetroHartford Alliance and the Hartford Foundation for Public Giving, to name just two.

Let me close with a reference to Hosley's picture of Hartford's past. While nostalgia is not a business plan, it does serve as a marker or gauge for what we once were, and what we should strive to be again. A bankruptcy filing might actually be the best way to get us where we need to go.

John M. Horak has practiced law at Reid and Riege P.C. in Hartford since 1980. His opinions are his own.

Read more

Don’t blame GE for leaving CT

State's lockbox proposal may be unenforceable

State needs human-services lockbox

Bloomfield bottling plant opposition misguided

Could Hartford Foundation help solve city’s budget crisis?

Hartford’s budget strain means uncertain future for popular events