Toward a Model Law for the Treatment of Distressed Local Public Entities

This article provides a rationale for a potential model law for the treatment of distressed local public entities (LPEs). Building upon our previous work, a first-of-its-kind global study of the treatment of LPEs in distress, we contend that a model law for LPE distress should take a modular approach, outlining alternative options that can be tailored to different jurisdictions’ distinct legal traditions and cultures. Although most of the countries in our study do not have a comprehensive system in place to address LPE distress, the commonalities that emerged across the jurisdictions studied can provide a foundation to support a model law in this area. While we leave the task of drafting a model law to future work, this article moves the discussion forward by articulating the principles, gleaned from our study, that should guide the creation of a model law on this subject.