After three years and more than $11 million in legal fees, the town of Vallejo, California, has dug its way out of bankruptcy, according to its lead counsel Orrick, Herrington & Sutcliffe parter Marc Levinson.
On Thursday, U.S. Bankruptcy Court Judge Michael McManus gave his preliminary approval to the city’s plan to exit Chapter 9 bankruptcy. That plan calls for reduced interest payments to bondholders, scaled-back health benefits for city workers, and retooled collective bargaining agreements with municipal labor unions that will cut pay for Vallejo employees, Levinson says: “Everyone’s taking a hit, that’s the maxim of bankruptcy.”
