Stockton
Becomes Biggest US City To Declare Bankruptcy (It's Official)
1
April, 2013
A
mere
nine months after we first discussed
the inevitability of Stockton, CA.'s bankruptcy, a judge has ordered
today that the city will now become the most populous in the US to be
declared bankrupt.
*STOCKTON
CREDITORS DIDN'T NEGOTIATE IN GOOD FAITH, JUDGE SAYS
Creditors
are pushing to get the city out of bankruptcy but the judge states
that "by any measure" the city was insolvent. So, in
summary, yeah, it was broke
years ago, it still is broke - despite the best efforts by the
Central Planning Reserve to reflate the same housing bubble that was
the primary reason for the city's insolvency in the first place.
Only this time, it's official!
Via
Reuters:
Stockton,
California, was ruled eligible for bankruptcy protection under
Chapter 9 of the U.S. bankruptcy code, a U.S. judged said on Monday,
turning aside creditors' arguments that the city was not truly
insolvent when it sought protection last year and had improperly
failed to seek concessions.
In
a case that has been widely watched by the $3.7 trillion municipal
bond market, U.S. Bankruptcy Judge Christopher Klein said Stockton
had established during last week's three-day trial that it had met
requirements to be found eligible to proceed with its municipal
bankruptcy case.
Officials
in the city of nearly 300,000, the largest city so far to have filed
for municipal bankruptcy, will now be allowed to start drafting a
so-called plan of adjustment for the city's debts.
The
case is expected to pit municipal bondholders against the California
Public Employee Retirement System, which manages pensions for
Stockton and many other California governments.
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