Research Network on Public Authorities and Financial Distress (RPAFD)

Local authorities experiencing financial distress require support. This can take various forms: financial (bail in, bail out, or a mix of these two methods), organisational, geo-political, etc. In most countries, this support is un-structured or considerably less structured than the support available to financially distressed companies, including state-owned and/or systemically relevant entities.

The main goal of RPAFD is to challenge this situation by providing a series of principled guidelines for the early detection and treatment of financially distressed local authorities, with the goal of minimising and mitigating the adverse consequences that the financial distress of a local authority may have on local communities and vulnerable local stakeholders.

RPAFD was established in early 2023. As evidenced in the other sections of this webpage, it has a research and dissemination agenda for the upcoming years.

The project is currently structured in two phases. In the first phase (starting in January 2024, lasting a minimum of 12 months), the contributors reflect and develop a common, principled understanding of essential concepts in the management of local authorities in financial distress. These concepts are: (i) financial distress; (ii) local authority; (iii) local stakeholders; (iv) local accountability; and (v) public interest. The contributors have been allocated to different working groups (WGs) based on their experience and research preferences. Each of the principal investigators in the project leads or co-leads one WG.

The second phase (January 2025 onwards) involves a more structured process designed at unpacking the specific issues faced by the management of financially distressed local authorities. The list of these issues will be published towards the end of 2024, and will be drafted in consultation with the contributors, the advisory board and the independent experts of this network. Provisional research questions include:

• What principles should inform local governance?
• What principles should inform the treatment of financially distressed local authorities?
• What is the medium-to-long term impact of budgetary decisions taken by local authorities on local citizens?
• What are the financial implications of the “insolvency” of a local entity?

RPAFD is organized in various working groups (WGs) dealing with specific topics that are relevant for developing a more informed understanding and a principled approach to the treatment of local authorities in financial distress. The WGs are comprised of team members / contributors involved in its projects, which are co-ordinated by one or more principal investigators.

Currently, RPAFD is structured in the following WGs:

1. WG1 – Financial Distress, co-led by Prof Emanuele Padovani and Dr Eugenio Vaccari. The full list of team members / contributors can be found here.
2. WG2 – Local Authority, led by Prof Laura N Coordes. The full list of team members / contributors can be found here.
3. WG3 – Local Stakeholders, led by Prof Geo Quinot. The full list of team members / contributors can be found here.
4. WG4 – Local Accountability, co-led by Dr André Lino and Prof Emanuele Padovani. The full list of team members / contributors can be found here.
5. WG5 – Public Interest, co-led by Prof Yseult Marique and Prof Geo Quinot. The full list of team members / contributors can be found here.

The principal investigators in this project are (in alphabetical order):

• Prof Laura N Coordes (Professor of Law, Arizona State University)
• Dr André Lino (Lecturer in Accounting, University of Essex)
• Prof Yseult Marique (Professor of Law, University of Essex)
• Prof Emanuele Padovani (Professor of Management, University of Bologna)
• Prof Geo Quinot (Professor of Law, Stellenbosch University)
• Dr Eugenio Vaccari (Senior Lecturer in Law, Royal Holloway, University of London)

The full list of team members / contributors to this project can be found here. The full list of advisory board members and independent consultants can be found here.

The project is not currently funded by any external organisations. However, the principal investigators are working closely with established international organisations in the field (e.g. the American Bankruptcy Institute, INSOL International and the European Bank for Reconstruction and Development) for the organisation of joint events and webinars on the topics covered by this network. Additionally, some of these organisations will provide expert support in commenting on the draft versions of the executive statements and final reports published by the network.

RPAFD organises a series of seminars and events designed to further the discussion and understanding of some of the concepts and issues faced by local authorities in financial distress. While these seminars are open to RPAFD members only, the edited recordings of these seminars are made available to the general public on this website.

• LOCAL AUTHORITIES. Guest speaker: Prof. Bruce A. Markell (Northwestern Pritzker School of Law). 23 February 2024 at 2 pm GMT. Moderator: Prof Laura N Coordes (Arizona State University). Agenda and link to the Zoom meeting available here. Slides shown during the meeting available here.
• LOCAL ACCOUNTABILITY. Guest Speakers: Prof. Eric Scorsone (University of Virginia) and Jeffrey Matsu (CIPFA - Chartered Institute of Public Finance & Accountacy). 23 April 2024 at 2 pm BST. Moderators: Prof Emanuele Padovani and Dr André Lino. Agenda and link to the Zoom meeting available here.
• PUBLIC INTEREST. Guest Speaker: Prof David N. Schleicher (Yale Law School). 12 July 2024 at 3 pm BST. Moderators: Prof Yseult Marique and Prof Geo Quinot. Agenda and link to the Zoom meeting available here.
• FINANCIAL DISTRESS. Guest Speaker: Prof. Andy Pike (Henry Daysh Professor of Regional Development Studies Centre for Urban and Regional Development Studies (CURDS), Newcastle University). 25 September 2024 at 12 pm BST. Moderator: Dr Eugenio Vaccari. Agenda and link to the Zoom meeting available here.
• LOCAL STAKEHOLERS. Guest speaker(s) TBA shortly. November 2024. Moderator: Prof Geo Quinot. Available here.

The topic of the treatment of local authorities and state-owned enterprises in financial distress will be at the centre of a round table organised as part of the 5^th International and Comparative Law Insolvency Symposium, which will take place at Royal Holloway, University of London on 25-27 April 2024. For more details on the event, as well as the relevant presentations and the recordings of the sessions and round tables of the event, please follow this link.

Prof Laura N Coordes, Prof Yseult Marique, Prof Geo Quinot and Dr Eugenio Vaccari have been invited to deliver a qualifying session to the barristers and students at the Honourable Society of Middle Temple (24 April 2024). Their presentation, titled “Municipalities in Financial Distress: An Environmental, Social and Governance (ESG) Critique” investigates 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. More information on this session is available here.

Two of our principal investigators (Prof Laura N Coordes and Dr Yseult Marique) and two of our team members (Prof Peter Murphy and Bernard K Dom) discussed the treatment of local entities in financial distress in the UK and USA in a podcast published by the International Insolvency Institute and available here. The podcast was published in November 2023.

Dr Eugenio Vaccari provided an opinion on whether financially distressed authorities should be allowed to increase local taxes in an article published on The Times on 23 September 2023. The article appeared in the “Money” section of the journal, in the “Big Question” segment, and it is available for consultation here.

Prof Yseult Marique and Dr Eugenio Vaccari commented on the complex situation of under-funded and financially distressed local authorities in the UK, and particularly with reference to the “bankruptcy” of Birmingham, in an article published on The Conversation on 6 September 2023. The full article is available here.

Prof Laura N Coordes and Prof Geo Quinot were interviewed by INSOL International on the topic of the treatment of local authorities experiencing financial distress. The podcast appeared in the “Hot Topics” section of INSOL Talks on 2 November 2022, and it is available here.

Prof Laura N Coordes, Prof Yseult Marique and Dr Eugenio Vaccari outlined the results of a comparative study on the treatment of local authorities in financial distress and the consequences of a local authority going “bankrupt” in an article published on The Conversation on 4 July 2022. The full article is available here.

This section will be populated with the executive statements and reports submitted by the contributors to the network.

This section includes a list of useful sources (books, articles, blog posts, websites, etc.) available  to researchers, policymakers, judges, practitioners and people interested in the topics listed below:

• financial distress;
• local authority;
• local stakeholders;
• local accountability;
• public interest.

A comparative study on the laws applicable to local public entities in financial distress is available here (INSOL International Technical library). Its findings have been summarised in an article published on the International Insolvency Review (E Vaccari, LN Coordes and Y Marique, ‘Global Trends in the Treatment of Local Public Entities in Distress: A Principled Approach’ (2023) 32(1) I.I.R. 93-121, available here). Additionally, an article providing a rationale for a potential model law for the treatment of financially distressed local public entities has been published on the Chicago-Kent Law Review (E Vaccari, LN Coordes and Y Marique, ‘Toward a Model Law for the Treatment of Distressed Local Public Entities’ (2023) 98(2) Chicago-Kent L. Rev. 339-360, available here).