2025

DOI: https://www.doi.org/10.31178/AUBD/2025.03

Abstract: This study analyzes the legal regime governing local public guarantees in the context of the insolvency of administrative-territorial units, highlighting a set of structural vulnerabilities in the current regulatory framework. The study examines the limits of an administrative-territorial unit’s own-revenue fund, the uncertain order of priority among the unit’s creditors, and the impact of the reorganization plan on secured claims. Within this framework, the authors propose criteria for classifying the principal claims involved in the proceedings, as well as a series of tests that can be applied by the insolvency judge to ensure a balance between the fundamental objectives of municipal insolvency law—the protection of creditors and the continuity of essential public services. By applying these criteria and tests—which address gaps in the law through the application of legal principles—judicial review can be grounded in a rational basis that helps mitigate the vulnerabilities of local public guarantees within the insolvency proceedings of administrative-territorial units.

Keywords: insolvency , administrative-territorial unit, local public guarantees, public funds.