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Published on 5/4/2012 in the Prospect News Distressed Debt Daily and Prospect News Municipals Daily.

Central Falls, R.I., city council asks court to discharge receiver

By Caroline Salls

Pittsburgh, May 4 - The City of Central Falls, R.I.'s city council has asked the U.S. Bankruptcy Court for the District of Rhode Island to "dismiss and discharge" the city's receiver, according to a Friday court filing.

"By the time of the hearing on this motion the receiver will have over-stayed its time limit as a change in the form of government as expressed by the Rhode Island Supreme Court," the council said in the motion.

The council said the two-year time limit will expire on July 16 at the latest.

As a result, the city council said the bankruptcy court should discharge the receiver, order it file a final interim account and report, "vacate and surrender the offices of government" and prohibit it from taking any more actions related to Central Falls' government.

"The Supreme Court did not grant or appear to authorize so-called periods of oversight greater than the two year limitation, and it would therefore seem that at the expiration of two years, political and financial control by the elective process should re-commence," the council said in the motion.

The council also said it was "obvious that the receiver rules in defiance of the elective process with a heavy and arbitrary hand."

"If the receiver overstays its authority it is akin to the loss of liberty contemplated in the compensation awarded in a civil false imprisonment," the council said.

"Every instant that the votes of the electors of the City of Central Falls count for nothing is a deprivation of liberty, which can never be recovered and for which recompense is practically incalculable."

Central Falls filed for bankruptcy on Aug. 1, 2011 in the U.S. Bankruptcy Court for the District of Rhode Island. Its Chapter 9 case number is 11-13105.


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