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April 2, 2013

Judge Rules Stockton Is Eligible for Bankruptcy in California 
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A federal judge has ruled Stockton, California, is eligible for
bankruptcy protection, rejecting complaints from the city's Wall Street
creditors. The ruling sets the stage for a battle over the future of
employee pensions after creditors objected to the city's plans to repay
its debt to the state pension system in full. U.S. Bankruptcy Court
Judge Christopher Klein ruled creditors had acted in bad faith when they
walked away from negotiations, but has yet to decide whether pensions
can be cut. Stockton became the largest city in the United States to
file for bankruptcy last June following the collapse of the housing
market and cuts that included slashing the police department by 25
percent.

 

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