What is chapter 9?
Chapter 9 is the chapter of the Bankruptcy Code that permits a municipality (which includes public entities such as cities and towns, as well as villages, counties, taxing districts, municipal utilities, and school districts) to seek adjustment of its debts under the supervision of a United States Bankruptcy Court. As a public benefit corporation created by State statute and regulated by the State, NYC OTB is a municipality permitted to file for relief under Chapter 9. The purpose of chapter 9 is to provide a financially distressed municipality protection from its creditors while it develops, negotiates and obtains court approval of a plan for adjusting its debts.
