Atlantic City officials are awaiting word on whether they can make payroll.
A judge on Friday is expected to decide if the city can make a scheduled payroll payment or save the money for its school system, forcing the city to shut down non-essential government services.
The state on Monday filed suit to stop the city from making the payroll payment because it owes its school district more than $30 million.
Gov. Chris Christie is trying to pressure Atlantic City Mayor Don Guardian and Assembly Speaker Vincent Prieto to support a state takeover measure that allows the state to renegotiate public employee contracts.
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Prieto objects to that and has proposed his own bailout legislation on Thursday that Christie declared it dead on arrival.