Ford signs bill to aid N.Y.

Press, Volume CXV, Issue 34022, 11 December 1975, Page 17

Ford signs bill to aid N.Y.

.CX.Z -Press Assn—Copyright > i WASHINGTON, Dec. 9 Without fanfare. President Ford signed into law his bill! today to provide $2.3 billion; in Federal loans to help New] York city escape bankruptcy. ( But — as a stop-gap ini case the loans prove inade-1 quate — the House passed, 373 to 29, a bill to amend the bankruptcy’ laws to make it feasible for a city the size of New’ York to file for bankruptcy before a Federal Court. The House Judiciary Com-! mittee said that existing law, ( unchanged since 1937, was! “hopelessly archaic and un-j workable.” President Ford had proposed revisions along the lines the House adopted, but applicable only to the nation's six cities of over one million population. But the House decided. 264 to 145, to make the new bank-1 ruptcy procedures available to all cities so that the larg-I est cities would not be stig-| matised The chief change in thej bankruptcy law would waive the requirement that a city' win the approval of 51 per

cent of creditors — bondholders, pensioners, employees and vendors — for a plan for financial reorgani-! sation before it is permitted! to file for bankruptcy.' New York has an esti- i mated 250.000 boldholders; and winning their advance! approval was felt to be impossible. But whatever financial plan | — for delayed or reduced; payment of obligations — is! proposed must be declared! “fair, equitable and feasible”; b.v a Judge and accepted by] a two-thirds vote of the city’s! creditors. An amendment proposed! by a member of the House of j Representatives. Mrs Holtz-j man, a Democrat, New York,] to provide a Federal guaran-i tee for the “certificates of! indebtedness” a city could! sell after filing for bank-. ruptcy was defeated 101 to nine. She argued that permitting I a bankrupt city to try to sell I such bonds was “an illusion-] ary remedy” because nobody ( would buy them without a ( Federal guarantee. The Senate agreed to take! up a similar bankruptcy re-! vision bill tomorrow.