While the state turned a watchful eye toward the judge’s Monday ruling on Stockton’s bankruptcy, none may have watched closer than officials in San Bernardino. There, both what the judge said and how he framed his opinion could have had far reaching implications into their own bankruptcy.
When Judge Christopher Klein ruled Stockton eligible for bankruptcy, officials in that city breathed a sigh of relief. But when Judge Klein described CalPERS as just a “garden variety” creditor, it cracked open a door to adjusting pension costs – and San Bernardino took notice.
San Bernardino has taken the opposite to its bankruptcy crisis that Stockton has. San Bernardino has suspended payments to CalPERS along with its other creditors, while Stockton continued making its payments. If Judge Klein’s ruling holds true, then San Bernardino may be able to adjust its debts with the pension giant. It is important to note, however, that Klein’s ruling does not serve as binding precedent.
Read the full story at the Inland Valley Daily Bulletin.