Providence RH bankruptcy seen as unavoidable on budget gap

March 29, 2012 by · Leave a Comment
Filed under: Credit News 

This is unfortunate events but in the end, these functions are beneficial.  By taking the pain now and restructuring programs to meet the available funds for ongoing operations.  We will and need to see much more of this so we can not have states running unsustainable budgets that they will not impose taxes and fees to cover.

Bloomberg - Providence Mayor Angel Taveras has put pressure on Brown University and other nonprofit organizations to help close a budget gap of at least $20 million, while Governor Lincoln Chafee is pressing lawmakers for action on measures to curb municipal pension costs. Unsustainable retiree expenses helped push Central Falls (1058MF) into insolvency. Moody’s Investors Service cut Providence debt a step to Baa1, third-lowest investment grade, this week citing its “strained” finances.

“Bankruptcy is not the preferred option for restoring Providence’s fiscal health; it is the last option, and I will do everything in my power to prevent it from happening,” Taveras said in a statement in response to a request for comment on Flanders’ remark. “I respectfully disagree with Judge Flanders that bankruptcy is unavoidable.”

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