The hedge-fund enclave of Greenwich, on the Connecticut Gold Coast, is about 100 miles and a world away from the state capital.
But the fiscal crisis in Hartford, the historic center of the American insurance industry, is fast becoming more representative than mansions or yachts of the wealthiest state in the U.S. The city is edging closer than ever to the breaking point, waiting for the financially troubled state government to step in.
It may seem crazy that a place as rich as the Nutmeg State, which counts among its residents hedge-funds masters like Ray Dalio and Steven A. Cohen and legions of Wall Street bankers, could be in such fiscal trouble. Last year, the per-capita income there was $71,033, the highest in the nation, according to the U.S. Bureau of Economic Analysis.
For all that, state-worker pensions have been underfunded for decades. Tax increases aimed at closing deficits have put a strain on an economy struggling from the loss of high-paying finance jobs, leaving it among the few that still havent recovered from the recession. The hedge fund industry fell on hard times, with about 1,060 shuttering globally last year. UBS Group AG abandoned the worlds largest trading floor in Stamford after the financial crisis, and the Royal Bank of Scotland downsized its office there. Pension, debt and health-care costs just kept growing.
Theres a limit to how much you can tax and theres a limit to how much you can cut before you damage the viability and attractiveness of the city,Mayor Luke Bronin said in May. Right now, from a fiscal standpoint, you have a capital city fighting with its hands behind its back."
Like many other local governments across the country, Hartford -- city of Mark Twain and the young John Pierpont Morgan -- has been grappling with budget problems for years. On the same day that Illinois lawmakers finally scraped together a long-overdue budget, Hartford hired the law firm Greenberg Traurig LLP to evaluate its options, which include bankruptcy. It would be the first prominent U.S. municipality to seek protection from its creditors since Detroit did so in 2013.
As for Connecticut, it faces a projected two-year deficit of $5 billion that lawmakers havent figured out how to close, even though the new fiscal year began on July 1.
In Hartford, the woes have been piling up for a while. Like Puerto Rico, which filed a record-setting bankruptcy in May, or even Greece, the city came to the edge in the usual way: slowly, then suddenly. The population declined 23 percent between 1960 and 2000 and has remained stagnant ever since. A third of its residents live in poverty, a higher share than in Baltimore or Newark. From 2010 to 2014, the metropolitan area saw the fifth-biggest decline in employers in the nation, according to the Economic Innovation Group, a Washington-based public policy organization.
Get the latest on global politics in your inbox, every day.
Get our newsletter daily.
Hartfords tax base of about $4.1 billion is about two-thirds that of neighbor West Hartford, which has far fewer residents, because half of the property -- state buildings, hospitals, universities, non-profit agencies -- is tax-exempt. Hartford has the highest property tax rate in the state and faces a $50 million deficit, nearly 10 percent of its budget. The citys credit rating may be downgraded deeper into junk by Moodys Investors Service.
Uninsured Hartford bonds maturing in 2024 traded at yields of more than 6 percent in late June, compared with about 4.4 percent in January, as investors jitters mounted. The city has $672 million in debt, including $228 million of uninsured bonds, according to data compiled by Bloomberg. It also guarantees about $70 million in debt for a minor-league baseball stadium downtown.
Photographer: Andrew Harrer/Bloomberg
Governor Dannel Malloy and Republican and Democratic leaders in the legislature agree the bankruptcy of the states capital isnt another negative headline they need. General Electric Co. has decamped from Fairfield to Boston, and last week Aetna Inc. said it was moving its corporate headquarters from Hartford, where it has been since 1853, to New York.About 250 jobs are going with it, though thousands will stay in town.
The state needs a budget that supports Hartford, its residents and its employers, said Chris McClure, a spokesman for Malloy. In the absence of action by the General Assembly on a budget vote, its entirely appropriate that the city explore all its options and prepare for every contingency."
Greenberg Traurigs team will be led by Nancy Mitchell, a co-chair of the firms restructuring practice, the city said in a statement. When Hartford was soliciting proposals from firms that specialize in bankruptcy, Council President Thomas Clarke told the local newspaper that looking into court protection from creditors would only be a last ditch option.
They will be working with us to examine all options for putting the city of Hartford on a sustainable path," the mayor said in a statement. 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."
In 2016, Bronin, a Democrat, took over a city that had been delaying its fiscal reckoning by pushing debt payments into the future, draining reserves and resorting to one-time measures, such as selling a parking garage, while its debt swelled by 52 percent from 2011 to 2015, according to Moodys figures.
Since taking office, hes cut 100 jobs and renegotiated leases and energy contracts. Bronins been less successful in getting concessions from unions: The citys fiscal 2017 budget assumed $16.5 million of concessions, the bulk of which havent materialized.
Hartford managed to strike a deal with its firefighters that saves about $4 million a year through 2020 by freezing pay increases, increasing pension contributions, lowering salaries for new hires and requiring employees to pay more for health care.
The city could renegotiate labor contracts and cut debt and pensions in bankruptcy, as a handful of cities have done since the recession. But it would need the governors consent to file for Chapter 9.
Bronin is lobbying for the state to fully fund a program that compensates local governments for revenue lost to tax-exempt properties, which alone would provide enough money to close next years deficit, and has joined with cities pushing to raise Connecticuts 6.35 percent sales tax to 6.99 percent to provide more aid.
He also persuaded Hartford Financial Services Group Inc., Travelers Cos. and Aetna to pledge $50 million to the city over five years as part of a comprehensive and sustainable solution for Hartford."
Original post:
In America's Richest State, the Capital Flirts With Bankruptcy ... - Bloomberg
- Boy Scouts' bankruptcy judge approves nearly $250 million in fees - Reuters - October 22nd, 2023 [October 22nd, 2023]
- What CARD's Clean Slate Post-Bankruptcy Could Mean For Autism ... - Behavioral Health Business - October 22nd, 2023 [October 22nd, 2023]
- 8 Senators Ask U.S. Treasury to Consider 'Going Concern' Bid to ... - International Brotherhood of Teamsters - October 22nd, 2023 [October 22nd, 2023]
- A Burger King franchisee gets sold out of bankruptcy, and a big buyer is Burger King - Restaurant Business Online - September 28th, 2023 [September 28th, 2023]
- Furniture-maker Noble House falls into bankruptcy, owes overseas ... - Retail Dive - September 28th, 2023 [September 28th, 2023]
- How to Get Your Own "Free" Private Investigator in Bankruptcy - Ward and Smith, PA - September 28th, 2023 [September 28th, 2023]
- Large Corporate Bankruptcy Filings Surged in First Half of 2023 ... - ABL Advisor - September 28th, 2023 [September 28th, 2023]
- MV Realty Files For Chapter 11 Bankruptcy - The Real Deal - September 28th, 2023 [September 28th, 2023]
- Vesttoo case: Time to "stop litigating and start cooperating" says ... - Artemis.bm - September 28th, 2023 [September 28th, 2023]
- BlockFi Bankruptcy Plan Receives Approval - Watcher Guru - September 28th, 2023 [September 28th, 2023]
- From Bank To Bankruptcy: How This Crypto Scam Toppled A US ... - Bitcoinist - September 28th, 2023 [September 28th, 2023]
- Mainstream Media Objects to Further Customer Data Redactions in ... - Cryptonews - September 28th, 2023 [September 28th, 2023]
- CARD's Founding CEO Returns to the Helm: What's Next for the ... - Behavioral Health Business - September 28th, 2023 [September 28th, 2023]
- "Calvin Klein was once on the verge of bankruptcy": BTS' Jungkook's ... - Sportskeeda - September 28th, 2023 [September 28th, 2023]
- Lerner Family Fight: Father's Actions led to Bankruptcy, son Says - The Real Deal - September 28th, 2023 [September 28th, 2023]
- Mercy Foundation asks court to clarify its role in bankruptcy - The Gazette - September 28th, 2023 [September 28th, 2023]
- Celsius bankruptcy auction nears end, with Fahrenheit in the lead - Reuters - May 18th, 2023 [May 18th, 2023]
- Surge in corporate bankruptcies just the start for debt-loaded firms - Business Insider - May 18th, 2023 [May 18th, 2023]
- 7 Companies Declare Bankruptcy Over Weekend in 15-Year Record - PYMNTS.com - May 18th, 2023 [May 18th, 2023]
- Credit Crunch Fuels 48-Hour Bankruptcy Rush With Seven Filings - Yahoo Finance - May 18th, 2023 [May 18th, 2023]
- Private equity-backed Envision Healthcare files for bankruptcy - Financial Times - May 18th, 2023 [May 18th, 2023]
- Drobo, having stopped sales and support, reportedly files Chapter 7 bankruptcy - Ars Technica - May 18th, 2023 [May 18th, 2023]
- Roxby Bankruptcy Cases Dismissed, Foreclosure Action Expected ... - Wheeling Intelligencer - May 18th, 2023 [May 18th, 2023]
- Voyager bankruptcy plan approved, customers may recover 35.7% of claims initially - Cointelegraph - May 18th, 2023 [May 18th, 2023]
- Bed Bath and Beyond's bankruptcy could help TJ Maxx owner TJX - Yahoo Finance - May 18th, 2023 [May 18th, 2023]
- IronNet: Near-Term Bankruptcy Filing Might Be In The Cards - Sell ... - Seeking Alpha - May 18th, 2023 [May 18th, 2023]
- Filing For Bankruptcy Protection Due To PFAS Litigation Costs - The National Law Review - May 18th, 2023 [May 18th, 2023]
- Full list of retailers that have filed for bankruptcy as shoppers go online to find deals... - The US Sun - May 18th, 2023 [May 18th, 2023]
- Quadriga CX Bankruptcy Claimants to Get 13% on the Dollar - CoinDesk - May 18th, 2023 [May 18th, 2023]
- Sorrento Therapeutics, Inc.'s Bankruptcy Court Orders Brokerage Firms to Credit Dividended Scilex Stock to Customers' Accounts and Sorrento Advises... - May 18th, 2023 [May 18th, 2023]
- Failing ventures and Twitter hiatus spark Tai Lopez bankruptcy ... - Protos - May 18th, 2023 [May 18th, 2023]
- Facing bankruptcy, Highland Park settles lawsuit over seized ... - WXYZ 7 Action News Detroit - May 18th, 2023 [May 18th, 2023]
- Judge in archdiocese bankruptcy case recuses himself over donations scandal - The Guardian US - April 30th, 2023 [April 30th, 2023]
- Revlon Taps New Directors as Lenders Take Control in Bankruptcy - The Wall Street Journal - April 30th, 2023 [April 30th, 2023]
- Opinion: Highland Park shouldn't declare bankruptcy over water debt - Detroit Free Press - April 30th, 2023 [April 30th, 2023]
- In Kolkata, India's new bankruptcy law is put to the test - Financial Times - April 30th, 2023 [April 30th, 2023]
- Judge in Catholic bankruptcy recuses over church donations - The Associated Press - April 30th, 2023 [April 30th, 2023]
- Judge in New Orleans Roman Catholic bankruptcy recuses himself over church donations - PBS NewsHour - April 30th, 2023 [April 30th, 2023]
- Four companies indirectly owned by Berkshire Hathaway file for bankruptcy (NYSE:BRK.B) - Seeking Alpha - April 30th, 2023 [April 30th, 2023]
- Pfizer Buys Lucira Health for $36.4M Through Bankruptcy Auction - GenomeWeb - April 30th, 2023 [April 30th, 2023]
- Bed Bath & Beyond shares drop after it files for bankruptcy protection - Detroit Free Press - April 30th, 2023 [April 30th, 2023]
- Bankruptcy Battle Breaks Out Over Greenwich Village Dev Site - The Real Deal - April 30th, 2023 [April 30th, 2023]
- US companies in distress turn to debt exchanges to dodge bankruptcy - Financial Times - April 30th, 2023 [April 30th, 2023]
- National retailer sold out of bankruptcy, will close remaining South ... - columbiabusinessreport.com - April 30th, 2023 [April 30th, 2023]
- Companies facing bankruptcy do this: Internet irate after Elon Musk led-Twitter reportedly slashed parental leaves - Business Today - April 30th, 2023 [April 30th, 2023]
- Tim Ziss Files For Bankruptcy To Extend Contract For Midtown Office - The Real Deal - April 30th, 2023 [April 30th, 2023]
- Future at Conway plant unclear after bankruptcy - Arkansas Online - April 30th, 2023 [April 30th, 2023]
- J&J Uses Cajoling, $9 Billion Offer to Sell New Talc Bankruptcy - Bloomberg Law - April 30th, 2023 [April 30th, 2023]
- Donald Trump and 5 Other Famous People Who Filed for Bankruptcy and What Happened Next - Yahoo Finance - April 30th, 2023 [April 30th, 2023]
- Beloved retailer and Michaels rival to close nine more stores amid bankruptcy fears see the full list of... - The US Sun - April 30th, 2023 [April 30th, 2023]
- Process - Bankruptcy Basics | United States Courts - March 31st, 2023 [March 31st, 2023]
- 10 years after bankruptcy scare, village is paying $2.5M in cash for new Village Hall - MLive.com - March 31st, 2023 [March 31st, 2023]
- Bankruptcy: What You Need to Know - NerdWallet - February 7th, 2023 [February 7th, 2023]
- DCG Creditor Pact Revealed With Plan to Sell Genesis Trading Unit as Part of Bankruptcy - CoinDesk - February 7th, 2023 [February 7th, 2023]
- Staring Down Bankruptcy, Bed Bath & Beyond Says It Will Sell Stock - The New York Times - February 7th, 2023 [February 7th, 2023]
- Pet store with several Mass. locations files for bankruptcy, will cease operations at end of month - Boston 25 News - February 7th, 2023 [February 7th, 2023]
- What Is Bankruptcy? Forbes Advisor - January 19th, 2023 [January 19th, 2023]
- Filing for Bankruptcy: What to Know | Consumer Advice - January 19th, 2023 [January 19th, 2023]
- Bankruptcy | California Courts | Self Help Guide - January 19th, 2023 [January 19th, 2023]
- Bed Bath & Beyond could file for bankruptcy 'as early as this weekend': Macco CEO - Yahoo Finance - January 6th, 2023 [January 6th, 2023]
- Bankruptcy Basics Glossary | United States Courts - October 23rd, 2022 [October 23rd, 2022]
- Cash crunch caused Thrifty Propane to file for bankruptcy: statement - WJW FOX 8 News Cleveland - October 19th, 2022 [October 19th, 2022]
- Chinese Steel Manufacturers On The Brink Of Bankruptcy - OilPrice.com - October 19th, 2022 [October 19th, 2022]
- Pennsylvania Bankruptcy Court Finds That Consent and Release Do Not Protect Against Wrongful Foreclosure Claim - JD Supra - October 19th, 2022 [October 19th, 2022]
- Congressional Candidate Critical of Loan Forgiveness Sought to Have Student Debt Cleared Via Bankruptcy - NBC4 Washington - October 19th, 2022 [October 19th, 2022]
- Bloomberg Tax Introduces New Portfolio Addressing Employee Benefits and Bankruptcy - PR Newswire - October 19th, 2022 [October 19th, 2022]
- Alex Jones claims bankruptcy: How will Sandy Hook families get paid? - Grid - October 19th, 2022 [October 19th, 2022]
- Bankruptcy - Michigan - October 17th, 2022 [October 17th, 2022]
- PFC to take RattanIndia plant to bankruptcy court this year | Mint - Mint - October 17th, 2022 [October 17th, 2022]
- Significant Fee increases for Bankruptcy and Winding-Up Petitions on the way - Lexology - October 17th, 2022 [October 17th, 2022]
- US Bankruptcy Court NJ - Live Database - October 15th, 2022 [October 15th, 2022]
- It Is Time To Change Bankruptcy Forum Laws - Patent - United States - Mondaq - October 13th, 2022 [October 13th, 2022]
- Judge in Archdiocese of Santa Fe bankruptcy sets proposed timeline to pay abuse victims - Yahoo News - October 13th, 2022 [October 13th, 2022]
- CMS Protests QHC Bankruptcy Plan Will Not Cover $1M Owed to Agency - Skilled Nursing News - October 13th, 2022 [October 13th, 2022]
- As Jury Deliberates In CT, Alex Jones And His Lawyers Are Setting Fire To Each Other In TX Bankruptcy Court - Above the Law - October 13th, 2022 [October 13th, 2022]
- Student loans are notoriously difficult to discharge in bankruptcy. A new bill could change that - Fortune - October 13th, 2022 [October 13th, 2022]
- Pioneering computer science alumnus battles bankruptcy and more on road to graduation - Oklahoma State University - October 13th, 2022 [October 13th, 2022]
- J&J Talc Bankruptcy 'Bad Faith' Claims Go Before Third Circuit - Bloomberg Law - September 20th, 2022 [September 20th, 2022]
- New amendments to bankruptcy code can maximise recovery of stressed assets - DNA India - September 20th, 2022 [September 20th, 2022]
- Judge reports threats, harassment over J&J talc bankruptcy - Reuters - September 17th, 2022 [September 17th, 2022]