§ 85.40 Repayment plan for municipality; court approval; continuation
of stay. Upon the filing of a petition pursuant to section 85.30 of
this title, a repayment plan may be filed by the municipality or, in the
event the municipality refuses to file such a plan after request by its
emergency financial control board or, after such request, fails to file
a plan within forty-five days from the filing of a petition pursuant to
section 85.30 of this title, the board may file a repayment plan
pursuant to this section on behalf of the municipality. Upon the filing
of such a plan, the court shall enter an order approving the plan and
extending any stay then in effect pursuant to section 85.30 of this
title as against all creditors of the municipality for such additional
period of time as is required to carry out fully all of the terms and
provisions of the plan with respect to those creditors who accept the
plan or any benefits thereunder, if the court finds, after a hearing,
that: (a) the repayment plan provides for the eventual satisfaction of
all debts and obligations of the municipality affected thereby; (b)
that, giving due regard to the financial condition of the municipality
and to the necessity for the municipality to expend moneys for services
and purposes determined to be necessary as provided in section 85.30 of
thit title, the repayment plan provides as prompt payment to all
creditors affected thereby, on a fair and equitable basis, as is
practicable in the circumstances; (c) that the repayment plan preserves
any applicable priorities among creditors or classes of creditors; and
(d) that the repayment plan was approved by the municipality's emergency
financial control board. In the event that the court is unable to make
the aforesaid findings as to the repayment plan, it shall enter an order
disapproving the plan and vacating the stay then in effect, which order
shall become effective within ten days from the entry thereof unless,
prior thereto, an amended repayment plan is filed with the court. Upon
the filing of the first such amended plan, the court shall extend and,
in its discretion, upon the filing of any further amended plans it may
extend the stay then in effect for such additional period of time as is
required to permit the court to enter an order containing findings
pursuant to this section with respect to the amended plan.