Stockton, Calif., to file for bankruptcy protection after talks with creditors fail
Ben Margot, Associated Press
STOCKTON, Calif. — After deliberation with creditors and labor unions failed, Stockton, Calif., officials said it will file for bankruptcy, making it the biggest U.S. city to seek court protection.
According to the city’s upcoming budget, Stockton plans to default on $10.2 million in debt and cut $11.2 million in employee pay and benefits, according to Bloomberg. The cuts have led to high crime and unemployment rates.
“The city is fiscally insolvent and must seek Chapter 9 bankruptcy protection,” Stockton said in a statement to Bloomberg. “In addition to the bankruptcy petition, the city will file a motion with the courts to share information from the confidential mediation.”
At least 18 creditors were involved in negotiations with the city, including California Public Employees’ Retirement System, the largest U.S. pension fund, according to Bloomberg.
The bankruptcy isn’t likely to hurt the municipal-bond market, as some experts say it isn’t a concern.
“There’s been enough talk about municipal bankruptcy and worries about it that when one actually happens, it’s a little beside the point,” Matt Fabian, managing director of Concord, Mass.-based Municipal Market Advisors, told Bloomberg. “It’s hard to see one city’s faltering pushing the market weaker.”
- Employee error ruins 41 acres of Salt Lake...
- Young entrepreneurs strut their stuff in bid...
- What 'The Office' teaches us about job...
- Cedar Fort on Publisher Weekly's list of...
- Lincoln Continental, the car of presidents,...
- Colorado drilling plan has safeguards for...
- Salt Lake City to become next Google Fiber city
- Embracing change: Utah County leaders examine...
- Employee error ruins 41 acres of Salt... 9
- US to pledge up to 28 percent emission... 5
- Oil council: Shale won't last, Arctic... 3
- Internet outages reveal gaps in US... 2
- Astronauts board space station for... 2
- US consumer spending edges up 0.1... 1
- Signed contracts to buy US homes climb... 1
- Lincoln Continental, the car of... 1