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The Takings Clause in Bankruptcy and How It Might Protect Illinois' Creditors

April 4, 2018, 7:31 PM

Although certainly not in the fiscal clear, Illinois finally approved a budget this past summer, narrowly avoiding default. As part of the budget legislation, the State also enabled the City of Chicago to securitize its sales tax. As a result, this past October, Chicago formed the Sales Tax Securitization Corporation (the “STSC”), which issued hundreds of millions of debt on December 14, 2017. Chicago transferred its right to present and future tax revenues to the STSC. In exchange, creditors lend money directly to the STSC, and the sales tax secures that debt. The STSC in turn gives the money it...

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