Bridgeport, Conn., could capitalize on a gap in the federal Bankruptcy Code that allows a municipality broad powers to overhaul labor agreements during bankruptcy proceedings, a bankruptcy lawyer said yesterday.

Jeffrey Cohen, a lawyer at the Denver-based law firm of Cohen & Herm, said Chapter 9 of the bankruptcy code, which allows for a municipality's financial restructuring, permits a government or other municipal body to recast collective bargaining agreements with its employees.

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