As the term suggests, this Chapter provide for re-organization of municipalities facing financial difficulties. Chapter 9 does not provide for liquidation of the assets of the municipality, in view of the protection afforded to States under the Tenth Amendment to the Constitution. Therefore, the municipalities are given the right to set forth a plan for adjustment of debts, which is thereafter implemented through the Courts. To be eligible to apply under this chapter, the Municipality must fulfill certain conditions laid down in Section 109 (c) of the Bankruptcy Code. The procedure under this section is also initiated by the filing of a petition by the municipalities before the concerned Court. This chapter also provides for discharge of liability subject to the confirmation of the plan and the submission before a disbursing agent any consideration that has been envisaged to be distributed under the plan and ensuring the validity of any securities submitted before the agent. The provision for discharge is subject to certain exceptions provided in Section 944(c). However, the power of the US trustee is very limited under this chapter
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