It got me thinking about what would happen if California went bankrupt.
In the absence of a statute, presumably the federal government would conduct some sort of bailout combined with a restructuring. If so, however, who would run the state during the proceeding?
Sunday, December 19, 2010
A California Bankruptcy, Dictatorship, and the Guarantee Clause
Interesting discussion at ProfessorBainbridge.com, especially in the comments. Personally, I don't think a state can go bankrupt. As a sovereign entity, it can simply default on its debts and claim sovereign immunity to deflect any law suits.