Petition of Municipality; Temporary Stay of Claims.

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§ 85.30 Petition of municipality; temporary stay of claims. A voluntary petition may be filed pursuant to this section by any municipality or, in the event a municipality refuses to file such petition after request by its emergency financial control board, or fails to do so within five days thereafter, the board may file a petition pursuant to this section on behalf of the municipality. The petition shall be filed in the supreme court in a county in which the municipality is located. The petition shall state: (a) that the municipality is unable to pay its debts or obligations as they mature; (b) that the municipality or its emergency financial control board intends to file with the court a repayment plan in compliance with the requirements of section 85.40 of this title; (c) the nature of the debts and obligations of the municipality which may be affected by the plan and the approximate amount thereof; and (d) the identities and addresses of creditors who may be affected by the plan or, in lieu thereof, the reason such identification is impracticable and a listing of creditors in a manner that is practicable in the circumstances. A petition filed pursuant to this section shall operate to prohibit the doing of any act, and to stay the commencement or continuation of any action or special proceeding in any court in any jurisdiction, seeking to apply or enforce against the municipality or any covered organization, or their funds, property, receivables or revenues, any order, judgment, lien, set-off or counterclaim relating to any contract, debt or obligation, direct or indirect, of the municipality, including but not limited to any bond, note or other evidence of indebtedness, or seeking the assessment, levy or collection of taxes by or for the municipality or the application of any funds, property, receivables or revenues of the municipality or any covered organization, for a period of ninety days; provided, however, that: (i) the stay may be vacated prior thereto if, upon motion of any creditor affected thereby, the court finds, after a hearing, that the petition was not filed in good faith; (ii) if a repayment plan for the municipality is filed within ninety days from the filing of the petition, or within such additional period of time as the court may find after a hearing is required to permit the preparation and filing of such a plan, the court shall extend the stay for such additional period of time as is required to permit the court to enter an order pursuant to section 85.40 of this title; (iii) any applicable statute of limitations shall be tolled during the period of any stay or extension thereof pursuant to this title; and (iv) during the period of any stay or extension thereof pursuant to this title, the municipality may expend moneys to maintain and provide such services and for such purposes as are determined to be necessary by its emergency financial control board.



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