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“ToMAYto, ToMAHto”: District Court Holds That Differences in State Law Determine Whether Unpaid Annual Pension Contributions Establish “Insolvency” for Chapter 9 Eligibility Purposes
Reprinted from: Pratt's Journal of Bankruptcy Law | 07/17/2025Cadwalader attorneys Ivan Loncar, Casey Servais, Lary Stromfeld and Thomas Curtin authored an article, “‘ToMAYto, ToMAHto’: District Court Holds That Differences in State Law Determine Whether Unpaid Annual Pension Contributions Establish ‘Insolvency’ for Chapter 9 Eligibility Purposes,” published in the July-August 2025 edition of Pratt’s Journal of Bankruptcy Law.
In the article, the authors analyze a court decision that “highlights the central role that state laws governing municipal pension contributions can play in assessing whether a municipality is ‘insolvent’ for purposes of Chapter 9 eligibility.”
The article contrasts this result with “a recent decision in the Chapter 9 proceeding of Chester, Pennsylvania, where Chester’s unpaid annual pension contributions helped to establish that Chester was ‘insolvent’ and therefore eligible for Chapter 9.” The authors explain, “The differing outcomes in the two cases can be explained by differences in the applicable state laws.”
Pratt’s Journal of Bankruptcy Law is published eight times a year and “features analysis, practical guidance, and commentary exploring bankruptcy legal developments and decisions.” Learn more here (subscription required).
