Moody's Investors Service said that confirmation of Central Falls' bankruptcy plan has a positive effect on other Rhode Island cities because it establishes a way out of bankruptcy that spares general obligation bondholders, Reuters reported yesterday. The city won court approval on Sept. 6 for its chapter 9 municipal bankruptcy plan, which hikes taxes, cuts employees and pensions, and reworks labor contracts while leaving bondholders whole. Moody's said that the plan and strong state intervention are not just a credit positive for Central Falls, but also for surrounding towns and cities, several of which are facing financial distress.
