Central Falls Bankruptcy Case starts to heat up.

The Providence Journal reports that the Receiver of Central Falls, former Supreme Court Justice Robert G. Flanders Jr., withdrew a motion that would have called the question of whether the Receiver can use bankruptcy powers to reorganize the city’s finances, contracts and claims.

That means the main legal event may have to wait until next month, when the city’s unions are expected to file their formal written challenges to Flanders’ bankruptcy filing.

At least one of them, the Fraternal Order of Police Lodge No. 2, indicated in a filing Tuesday that it plans a challenge.

“The order for relief may be entered only upon a determination that the debtor has demonstrated it was eligible to file the petition and that the petition was filed in good faith,” FOP lawyer Diane Finkle argued in her filing. “The debtor herein has yet to establish such eligibility in light of the opposition to its petition.”

Special bankruptcy Judge Frank J. Bailey has set Sept. 16 as the deadline for filing objections to the bankruptcy, along with affidavits to support those arguments.

But that is about two weeks after the time Flanders has said he hopes to have a fiscal reorganization ready for the court to approve. In the meantime, he and the unions continue to negotiate possible out-of-court agreements.

Flanders’ lawyer, Theodore Orson, has said Flanders believes he is acting correctly under the law and expects Bailey to agree. Lawyers for the unions have declined to speculate on how Bailey might rule or how a ruling might be implemented.

This will be a legal challenge that everyone will be paying attention to.


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