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Townhall
Finance
Judge
Says San Bernardino
Bankruptcy Can Continue
By Mike Shedlock
Aug 31, 2013
In
a common sense ruling sure to
have union advocates howling, a Federal judge says San Bernardino,
California
eligible for bankruptcy
Judge Meredith Jury of the
U.S. Bankruptcy
Court for the Central District of California, said the city of 210,000,
located
60 miles east of Los Angeles, was eligible for bankruptcy protection
"as a
matter of law based on incontrovertible facts."
The
tentative ruling came despite
objections by the California Public Employees' Retirement System, or
Calpers.
The $260 billion pension fund is the city's biggest creditor.
San
Bernardino filed for bankruptcy
protection one year ago.
If
the jury affirms the ruling, it
would clear the way for the city to negotiate with its creditors and
produce a
final bankruptcy plan on which the judge will ultimately have to rule.
The ruling also sets up a
high-stakes battle
between Calpers and other creditors, including Wall Street bondholders
and
insurers, over how they will be treated in the bankruptcy.
The
preliminary ruling follows a
similar judgment for the city of Stockton, California, which was found
eligible
for bankruptcy protection in April.
"I
don't think anyone in this
courtroom seriously thought the city was anything but insolvent," Jury
said. A city must be insolvent and have proof to have negotiated in
good faith
with creditors to be eligible for Chapter 9 municipal bankruptcy...
Read
the rest of the article at
Townhall Finance
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