Long Beach, N.Y., a city of about 34,000 on Long Island’s south shore, is considering restructuring obligations that could surpass $460 million as it faces a court judgment that exceeds its annual revenue, Bloomberg News reported. The community, about 25 miles east of New York City, last week hired M3 Partners, LP to help it develop a restructuring plan and O’Melveny & Myers LLP for legal advice, according to city meeting minutes. In January, a Nassau County judge awarded about $130 million to a developer who had sued the city in 1989 over the revocation of permits to build condominium towers. The court judgment, which is more than Long Beach’s roughly $85 million in annual revenue, capped years of financial mismanagement by the city, including borrowing to pay operating costs, according to the state Comptroller’s Office. Long Beach, which was walloped by Superstorm Sandy in 2012, has also been plagued by management turnover. “We’ve got to do something to get things back in line,” said Long Beach City Manager Donna Gayden, adding that the city is appealing the judgment. “We’re making sure we’ve recorded all the long-term liabilities, that there’s nothing else sitting out there and doing the first part of the work.” Long Beach had about $120 million in bond debt and $140 million in retiree health-benefit liabilities as of its most recent financial statement. The city, where actor Billy Crystal grew up, also owes about $30 million for compensated absences like sick leave and vacation pay and another $40 million in liabilities for pensions, employee separation agreements and other claims. Long Beach doesn’t have an immediate need to file bankruptcy, according to people familiar with the matter who asked not to be identified because the deliberations over the municipality’s finances were private.
