Bankrupt City | featured news

The San Bernardino City Council votes to file for bankruptcy. Facing a $45-million budget shortfall and the prospect of not being able to pay city workers, the panel Tuesday voted to file municipal bankruptcy, the third California city to do so in recent weeks.

SAN FRANCISCO (Reuters) - Mammoth Lakes, California filed on Tuesday for Chapter 9 bankruptcy protection from its creditors due to a nearly $43 million legal judgment against it.

The man in charge of the biggest U.S. city ever to file for bankruptcy is clear about the root of the crisis. It was a decision that gave firefighters full healthcare in retirement starting on January 1, 1996, said Bob Deis, the city manager of Stockton, California.

Stockton, California, the largest city in the United States to ever file for bankruptcy, could create a new template for struggling cities and potentially lift the stigma that scars municipalities if they seek court protection from creditors.

This Gold Rush-era port city, an epicenter of California's agricultural exports, will become the nation's largest city to seek protection under the U.S. bankruptcy code after its City Council on Tuesday stopped bond payments, slashed employee health and retirement benefits and adopted a day-to-day survival budget.

Stockton, the California city with the nation's second-highest foreclosure rate, is facing a moment of decision on whether to become the biggest city to file for bankruptcy, as a deadline for talks between the city and its creditors approached late Monday.

Court battles with employees and lenders that could stretch over years is likely to await Stockton, Calif., if it becomes the largest U.S. city ever to file for bankruptcy.

Stagnant revenue and rising employee costs threaten City Hall with a $222-million shortfall, official says. A proposal to outsource ambulance services provokes anger from firefighters union. Los Angeles' top budget official raised the specter of bankruptcy Friday in a sweeping report that calls for new taxes, possible layoffs and the privatization of some city services.

Pennsylvania’s financially distressed capital city is seeking Chapter 9 bankruptcy, citing overwhelming debt, but Harrisburg’s mayor and top city lawyer said the filing signed by a City Council member was not legal. The petition docketed by U.S. Middle District bankruptcy court Wednesday listed about $458 million in creditors and claims, and said the city faced “imminent jeopardy” from six pending legal actions by creditors related to a debt-saddled trash incinerator.

The city of Central Falls, Rhode Island — one of a handful of U.S. cities and counties facing fiscal collapse in the wake of the economic recession — has filed for bankruptcy.