Two of San Bernardino’s creditors are objecting to a Chapter 9 filing that they say was either filed prematurely or was filed as a result of self-inflicted damage.
CalPERS, who is the largest holder of city credit, says that it is currently impossible to evaluate the merits of the Chapter 9 filing because the city has not been able to produce a complete accounting of its financial situation. Audits are incomplete and city leaders have failed to come to an agreement on how the city can cut enough of the $45 million deficit to restore fiscal stability – an essential part of the Chapter 9 process.
The Mid-Managers Union say that the city has had numerous opportunities to address its building fiscal crisis, but their failure to act represents a self-inflicted harm that would weaken a Chapter 9 case.
When city officials voted to declare bankruptcy in July of 2012, they said they’d only recently learned of the dire nature of their financial troubles. However, the union points to statements made as early as 2010, when the city manager told the council that they had to act or face eventual bankruptcy.
Read the full story at The Sun.