Municipalities in Financial Distress: An Environmental, Social and Governance Critique

The treatment of local public entities or municipalities in distress is a largely under-explored area of law. The rules regulating these processes are often unaffected by the influence of legal principles developed in areas such as bankruptcy and restructuring law. Yet the insolvency of a municipality has a huge impact on local, regional and national stakeholders.

As municipalities cannot be liquidated, their crises present unique opportunities to address triggering factors and lay the foundations for their long-term “renaissance”. However, the regulatory approaches of the jurisdictions considered in this book (South Africa, the United Kingdom and the United States) fall short in promoting long-term solutions to address the causes of municipal distress.

Building on previous comparative studies conducted by the same co-authors, this book adopts a legal-realist perspective to investigate the extent to which environmental, social and governance (ESG) considerations play a role in shaping the content of the restructuring plans and strategies to turn around local public entities in distress. Both an academic and a professional audience, including from non-legal sectors such as banking, accountancy, political science and policy studies, will appreciate this law-in-context analysis of the treatment of municipalities in distress.