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This case tracks the long series of factors-historical, political, cultural, managerial-which culminated with the prospective bankruptcy of the Buffalo (NY) public school system, in the face of a court-ordered back pay settlement with its teachers union. The case allows for discussion and analysis of a great range issues, particularly those related to leadership style and decisions. The approach to labor relations by the school system''s superintendent, the role of the elected school board, the relationship between the public schools and city government as a whole, ethnic politics in Buffalo, New York State labor laws regulating public sector unions-all these figure in the series of events which lead to New York State''s highest court ruling, in December, 1996, that the Buffalo schools owed more than $200 million in back pay to teachers, an amount equal to more than half the system''s annual budget. More broadly, this detailed historical case could serve as a capstone reading or discussion vehicle for a course considering the forces at work in contemporary U.S. urban politics.