Central KY town considering bankruptcy

The budget woes of Kentucky’s largest cities – Lexington and Louisville – have garnered media attention as they tackle budget shortfalls now in the tens of millions of dollars. 

But things appear much worse for the central Kentucky town of Crab Orchard, which sits about 20 miles southeast of Danville. 

According to an article by Danville Advocate-Messenger’s Todd Kleffman, leaders in the town of 900 are considering bankruptcy as a possible remedy for an outstanding debt of $2 million. 

The debt is from a loan the town secured to help ERJ Manufacturing to locate a metal stamping facility there. The facility was built with the agreement that the company would help the city repay the loan and share its profits, but the company left town with the loan outstanding, according to the Advocate-Messenger. 

“There were some bad decisions made, some bad loans made,” Crab Orchard Mayor Bill Dyehouse said Tuesday. “Banks should have never loaned the city that kind of money.”


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