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.
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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.
Prieto objects to that and has proposed his own bailout legislation on Thursday that Christie declared it dead on arrival.