Central Falls is Bankrupt

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The city of Central Falls in Rhode Island has filed for bankruptcy on August 1. This has led to severe cuts in workers’ benefits and disruption to city services.

About 18,000 people live in Central Falls, a city located north of Providence, which is the state’s poorest municipality. For the current fiscal year that began July 1, the city is already projecting a deficit of $5.6 million. On top of that, the city also has $80 million in unfunded pension obligations it owes to 141 retired firefighters, police officers and their next of kin.

Central Falls went under receivership about 14 months ago and since then has had to pay about $800,000 in concessions it negotiated with the union and non-union workers. In recent times, many job vacancies have not been filled and city-owned buildings have been closed. The city lacks some basic services and infrastructure and this situation will only worsen as more federal cuts in funding are imposed.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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