Quote Originally Posted by corktownyuppie View Post
With EM law as it is in place, the emergency manager will actually have most of those powers, plus the advantage of being able to do so swiftly. Clearing out unreasonable contracts, restructuring departments, etc., etc.

Bankruptcy offers some benefits in that it allows all creditors to have their day in court, arguing about why their payments should take precedence over others' payments.

Guess what. This drags the process out for years, generally comes to the same conclusion, and destroys any ability to borrow funds going forward. It's ugly.

An EM will not be able to "cancel old debts", but it can unilaterally settle them. For example, it might say, "We owe you $300,000. We don't have money to pay you. We will give you $25,000 today, with a 75,000 note due in 20 years. Or we can take it to bankruptcy court and you'll get zero."

This is going to be painful and shitty no matter which way we do it. But it's better to get all the pain done at once. Would you rather have the stock market drop by 6,000 points in one day, with 4 more months of consecutive gains to follow? Or would you rather drag the 6,000 point loss over a 3-year, drag-it-out fight to the death."?

Which would be better for business? For consumers? For residents? For vendors? For employees?

The people who are really opposing the emergency actions are denying the fact that pain is coming. Trust me, when it gets here, I'd rather it be swift and over so we can move on the healing.
If what you describe is accurate, then I agree. Bankruptcy is however well established. EFM appears to be subject to political whim.