Bondholders should be able to sue to city commissioners who are, after all, responsible for the fiscal state of the city and the default on the bonds.
Better yet, bondholders get completely wiped out here and stop investing in debt ridden, mismanaged cities. One of the best things that could happen would be for investors to AVOID loaning corrupt, liberal Democrat cities more money.
And if bondholders won't learn a lesson from this and keep dumping their money into these cities, then they deserve to lose everything.