Billionaire-investor Warren Buffet said on Friday that bankruptcies by three California cities in three weeks are making traditionally objectionable chapter 9 municipal bankruptcy filings more palatable to local governments in financial crisis, Reuters reported on Friday. "The stigma has probably been reduced when you get very sizeable cities like Stockton or San Bernardino to do it," Buffett said. "The very fact they do it makes it more likely. Buffett, the chairman of Berkshire Hathaway Inc., said that he does not believe that the U.S. would see defaults on hundreds of billions of tax-free debt issued by its states and local governments. Some government leaders will likely use municipal bankruptcy or the threat of a chapter 9 filing as a tool to win concessions from creditors and organized government workers if the onus of bankruptcy eases, he said.
