Financial distress and municipal bankruptcy: the case of prichard, alabama
Journal of Public Budgeting, Accounting & Financial Management
ISSN: 1096-3367
Article publication date: 1 March 2005
Abstract
Since 1934, the federal government has provided a process for municipalities to declare bankruptcy, and approximately 500 governments have done so. In recent years, an average of less than one city government declares bankruptcy each year. In this article, the authors identify five factors that contribute to financial distress for cities which, if left unattended, can lead to municipal bankruptcy. This discussion is followed by an examination of the events that led to the bankruptcy of the City of Prichard, Alabama, once a prosperous suburb of Mobile. The authors conclude that this municipal bankruptcy occurred, in large part, because Prichard failed to face the factors of financial distress identified by the authors in the years prior to filing for bankruptcy.
Citation
Watson, D.J., Handley, D.M. and Hassett, W.L. (2005), "Financial distress and municipal bankruptcy: the case of prichard, alabama", Journal of Public Budgeting, Accounting & Financial Management, Vol. 17 No. 2, pp. 129-150. https://doi.org/10.1108/JPBAFM-17-02-2005-B001
Publisher
:Emerald Publishing Limited
Copyright © 2005 by PrAcademics Press