(Bloomberg) -- Atlantic City’s fiscal crisis may prompt New Jersey to depart from its historic practice of supporting local-government finances as the gambling hub heads down a path similar to Detroit’s.
An emergency-management team hired by Gov. Chris Christie that includes Kevyn Orr, who guided Detroit’s record bankruptcy, is considering deferring bond payments to help fix the seaside city’s finances, according to a March 23 report.
Asking bondholders to accept less than they’re owed would undermine New Jersey’s reputation for nurturing distressed cities, said Ted Molin, a senior credit analyst at Wilmington Trust Co. in Delaware. The last time a municipality in the state defaulted was during the Great Depression, according to its Department of Community Affairs.
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