Rover -- you can't put the T through an orderly or disorderly bankruptcy without putting Massachusetts through the same
The T is not a corporation chartered by Massachusetts -- it is organized as an independent authority -- in fact it is a department of the Commonwealth in the same way as the Department of Conservation and Recreation
Ultimately all of the T-s bonds are backed by the Full Faith and Credit of the Commonwealth aka the Tax Payers of Massachusetts --
However -- the desire to control what is happening at the T is why we now have another layer of bureaucracy on top of the T -- in other words the T's Financial Control Board -- which was given relatively extraordinary powers by the Great and General Court as signed by the Governor
BUT -- the Financial Control Board is a temporary measure and some of the most agregious aspects of the T were not released to their control as certain members of the Legislature are still strongly linked to the T Unions -- remember even though Whitey [err Billy] Bulger is gone -- the MBTA still hearkens back to days when the translation of MBTA was Mr Bulger's Transit Agency and people poured quarters into their pants in the counting room
did some digging and this is what I came up with:
Can a State, County, or City Government File for Bankruptcy? | Bay Area Bankruptcy Buzz
The answer is no, yes, and yes. During recent budget sessions in the California assembly a representative suggested that the State of California should file bankruptcy. It is not possible under the United States Constitution for a state to file for bankruptcy and discharge debts. County...
www.westcoastbk.com
"Chapter 9 provides that municipalities may reorganize their debts. The Bankruptcy Code defines a municipality as a “political subdivision or public agency or instrumentality of a State.” Municipalities include cities, towns, villages, counties, taxing districts municipal utilities, water districts, school districts, bridge authorities, highway authorities and gas authorities. "
While not knowing if anything specific in Mass law would prevent this, it looks like its kosher under federal law.