Central Falls bankruptcy case begins in court


The state-appointed receiver overseeing cash-strapped Central Falls began Wednesday to lay out in federal court the case for the city’s municipal bankruptcy and offered a glimpse of its planned way out.

Theodore Orson, attorney for receiver Robert G. Flanders, said Flanders intends to “fix Central Falls” because the status quo is “unsustainable and unacceptable.”

Orson began by noting to federal Judge Frank Bailey the steps the receiver took to avoid bankruptcy. Flanders filed for bankruptcy Monday on behalf of Central Falls. He has asked the court to void the city’s collective bargaining agreements and employment contracts.

Attorneys for Central Falls police and firefighters and city retirees also attended the hearing.

Flanders has said he would like the bankruptcy to be over within six months, but it could take much longer if retirees and union members fight cuts in court.

Orson said he wants to file a “consensual” plan of recovery to the court within 30 days, agreed to by municipal workers and retirees. But he challenged those groups to offer their own plan, if they have one. He said it must be realistic, feasible and sustainable.

“One thing we are not is Peter Pan,” Orson said. “We can’t spread angel dust” and fix the city’s finances by spending more than it brings in.

During a recess in Wednesday’s hearing, Flanders said he’s interested in hearing alternative proposals from city retirees and workers.

“If somebody can come up with a better suggestion, we’re all ears,” Flanders said. “None of us wants to linger here one day longer than we have to. The more fights we have about issues, the more delay is brought into the process.”

Central Falls must find $5.6 million to balance its budget this fiscal year. Flanders is proposing to save $2.5 million through cuts to pensions and health care benefits. The rest would have to come from elsewhere. Court filings indicate that significant cuts to police and fire budgets are under consideration.

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