Professor Ayer Comments on Vallejo Bankruptcy for California Report
Professor John "Jack" Ayer commented on the possibly impending bankruptcy of the City of Vallejo for a segment of The California Report airing on KQED on February 8.
Cities consider bankruptcy only "very rarely," Professor Ayer said, "but every municipality everywhere has budget problems of some sort right now."
If a judge approves Vallejo's bankruptcy plan, some city employees would receive as little as five cents on the dollar for some health and retirement benefits-a prospect that may encourage employee unions across the state to approve concessions they might not otherwise have considered.
"I wouldn't be at all surprised if there were a lot of Californians who are looking at what's happening at Vallejo and deciding that they might as well take some cuts because it's real this time and either they do it the cheap way or they do it the costly way," said Professor Ayer.
John D. Ayer is a professor emeritus at the UC Davis School of Law and an expert in bankruptcy law.