Stockton’s fate will be determined on Monday, according to the federal bankruptcy judge overseeing the case. The case, which has pitted CalPERS against Wall Street, will ultimately determined the validity of the nation’s largest-ever municipal bankruptcy filing.
Wall Street Creditors, angry over what they describe as bad-faith negotiations, want to see CalPERS obligations subject to the same cuts those that their assets face. According to some of the thousands of pages of documents, Stockton offered 17 and 18 cents on the dollar to its creditors, while offering to continue to pay the full pension obligation to CalPERS.
The issue is further complicated by the City’s mayor, who was elected after the City filed for bankruptcy. He continues to push a plan that would seek a sales tax increase for public safety. Adding revenues to the City while continuing a bankruptcy case played to the Wall Street arguments that the City could have done more to avoid bankruptcy. Mayor Silva, however, says that the new tax money wouldn’t go to creditors, only to public safety.
Read the full story at the Sacramento Bee.