Disney says the Reedy Creek Improvement District cannot be dissolved by the Florida Legislature and Governor Ron DeSantis until all of the district’s debt is repaid. A local attorney says Disney is right and the move is illegal.
Here is my brief description of why the Florida Legislature cannot dissolve Reedy Creek due to basic sovereign debt protections.
The day I wrote this, I asked city finance officials for an assumption based on Reedy Creek and they figured the problem would never happen. https://t.co/q1uULD6doD
— Jacob Schumer (@JacobJSchumer) April 26, 2022
Governor Ron DeSantis signed the law dissolving the Reedy Creek Improvement District Friday night.
But in a statement, Disney says that if the district’s debts are not repaid, the dissolution cannot move forward. The district has about $1 billion in debt.
Jacob Schumer, a lawyer with Shepard, Smith, Kohlmyer & Hand, in Maitland, says the company is right.
“Under the constitution, a state cannot promise bondholders that they will honor the debt. And then eliminate the district that incurred this debt.
Schumer says he doesn’t think the state’s case would hold up in the event of a lawsuit.
“I believe Disney is correct in saying that they cannot do this without all obligations being paid in full. There are many ways Florida has to address this issue and perhaps make the case less clear. But as the law stands, I don’t see any way to resist a challenge, although someone will have to challenge it.
Currently, the district is expected to be disbanded by June 2023. Disney says it will continue to operate as normal.
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