One month ago, Judge Christopher Klein ruled in the city of Stockton, CA bankruptcy case that public employee pension obligations can be impaired in municipal bankruptcy cases under Chapter 9 of the Bankruptcy Code. Last week, however, Judge Klein approved
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Stockton’s Confirmed Plan: “The Best Bad Idea”
Last week Judge Klein approved Stockton, California’s plan of adjustment allowing the city to exit bankruptcy without addressing its largest liability – pensions. Stockton’s plan called for budget cuts, haircuts for bondholders, and a sales tax increase approved by voters…
Anderson on NPR discussing Stockton’s effort to emerge from bankruptcy
Michelle Wilde Anderson (Stanford) was on NPR's Here and Now today discussing Stockton, California's effort to emerge from bankruptcy. Listen here: Description here:Two years of financial limbo came to an end yesterday in the Northern California city of Stockton. A…
Stockton Judge: Pension Obligations Are Not Impervious to Impairment In Chapter 9 Bankruptcy. What Comes Next?
By Ben Feder
The perception that public employee pension obligations cannot be impaired in bankruptcy suffered a damaging blow several months ago in the City of Detroit bankruptcy case, and has now been fatally wounded by the recent ruling of Judge Christopher…
Will The City Of Chicago File For Bankruptcy?
My last post was motivated by an interesting article in the L.A. Times, written by Chris Megerian, Melody Petersen, and Dean Starkman, that discussed the recent ruling by Judge Christopher Klein, the judge in the Stockton, California Chapter 9…
What Happens To Pensions In A Chapter 9 Bankruptcy?
One chapter of the Bankruptcy Code that up until the last few years had not gotten much use is Chapter 9. It is the chapter under which municipalities such as cities and counties file for bankruptcy protection.
On October…
Public Pensions After Detroit and Stockton
Well, returning briefly to my series on municipal bankruptcies – you really can’t write regularly about pensions in this day and age without addressing, even if unwillingly, that topic – the NY Times has a very interesting article on Stockton,…
Stockton Bankruptcy Settlement Preserves Pensions
By Ben Feder
The Chapter 9 bankruptcy case of Stockton, California has come to an unexpectedly quick and consensual resolution. The outcome here, which will see the city’s pension obligations maintained, is particularly surprising given the vehement opposition of Stockton’s bond insurers…
All Aboard For Stockton
I recently posted elsewhere that the City of Stockton, California had filed a plan of adjustment to which the principal competing creditors–retirees (through their proxy CalPERS) and bondholders had agreed. Implementation of the plan was conditioned on Stockton residents agreeing
…
The Stockton Saga Continues: Untouchable Pensions on the Chopping Block?
Judge Christopher M. Klein’s decision to accept the City of Stockton’s petition for bankruptcy on April 1, 2013 set the stage for a battle over whether public workers’ pensions can be reduced through municipal reorganization.
Stockton’s public revenues tumbled dramatically…