ILLINOIS (WTVO) — The state of Illinois’ right to borrow money to pay down old bill is being challenged in court.
The lawsuit puts billions of dollars of taxpayers money at stake.
When Illinois had $17 billion in unpaid bills it came with a 12% interest.
In an attempt to get vendors paid, the state borrowed $6 billion at 5% interest.
CEO of the Illinois Policy Institute John Tillman and a New York Hedge Fund are questioning that.
Warlander Asset Management holds Illinois debt, so it makes money when bills go unpaid.
They’re lawsuit claims the state’s budget tactics aren’t allowed in the state constitution.
“It makes me sick to my stomach that guys like John Tillman would actually have the stones to go to court and try to get us to be deadbeat states,” said Susana Mendoza (D), Illinois Comptroller. “Like he is actually as a Republican saying that Illinois should not pay its bills, but Illinois should go bankrupt so his pals can make a ton of money in exchange for the state’s demise.”
Tillman calls the state’s spending method reckless.
He also says he does not personally hold and Illinois debt or related securities.
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