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.”
- Mitt Romney tells UVU grads to 'live a large...
- GM to spend $5.4B on US factories over 3...
- Historic Salt Lake building now home to...
- More Americans spending at least half their...
- Proposed trade legislation could boost Utah...
- Rural hospitals struggle to stay open, adapt...
- Questar to cut rates by $52 million
- Michelle Singletary: Stop picking on the poor
- Mitt Romney tells UVU grads to 'live a... 22
- Michelle Singletary: Stop picking on... 21
- Pope echoes feminist anthem of equal... 6
- Proposed trade legislation could boost... 5
- More Americans spending at least half... 4
- Many Salt Lake residents still balk at... 4
- US factory activity improves in April,... 3
- We finally understand what robots mean... 2