May 19, 2010

What is Municipal Receivership?

Carroll Andrew Morse

Pardon me for asking what might be a silly question here, but what does a municipal receivership of the kind being undergone by Central Falls actually mean?

I've looked through the Rhode Island General Laws, and there is no mention of municipal receivership there that I am able to find.

There's something in Federal law called "Chapter 9 bankruptcy" that relates to local governments. According to a Richard Dujardin Projo article from April 23 of this year, the Central Falls City Council had "voted to ask the General Assembly to enact legislation allowing Central Falls and other municipalities to file for bankruptcy protection", but I can't find any evidence that the legislature acted in response.

The resolution passed last evening by the Central Falls City Council asking for a receiver to be appointed (available via the Projo's website) cites no legal authority; its content is mostly a bunch of different variations on the theme of "we're broke and we want to give up".

And the order issued by Superior Court Judge Michael Silverstein placing Central Falls into receivership (also available via the Projo's website) makes mention of only one legal authority, State Supreme Court Executive Order 95-01, but no specific, full-fledged law.

Given that other Rhode Island municipalities in addition to Central Falls could conceivably pursue this course of action, I think we need to explore the meaning and consequences of municipal receivership a little more...

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Good question, Andrew. Is the text of "State Supreme Court Executive Order 95-01" available someplace?

Also, how can a court issue an "executive order"? Aren't such things reserved for the executive branch? Or wouldn't a court's "executive order" need an underlying law to have any effect?

Posted by: Monique at May 19, 2010 9:14 PM

I'm not familiar with the particular executive order (95-01), but I'm guessing it has something to do with the manner in which a judge is to select a receiver.

With regard to the availability of such orders on-line, orders going back to 2000 are available on the website of the Supreme Court.

These executive orders deal with internal judicial branch housekeeping issues, such as the procedure for appointing counsel for indigents, court closure for weather emergencies, or the scheduling of system-wide educational conferences, etc.

By statute (R.I. Gen. L. sec. 8-15-2) the Chief Justice is the "executive head" of the judicial system, with authority to assign personnel, establish court calendars, etc., and therein lies his authority to issue such orders.

Posted by: brassband at May 19, 2010 10:04 PM

So court executive orders pertain to the court. Thank you for clarifying, Brassband.

Posted by: Monique at May 20, 2010 2:16 PM
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