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Analysis: Stockton and San Bernardino, a tale of two bankruptcies

Bankruptcy - Reuters

Stockton and San Bernardino, the two California cities that have filed for bankruptcy protection, are both considered test cases in the epic battle over whether municipal bondholders or pensioners will absorb most of the pain when a government goes broke.

 

How a Plan to Help Stockton, Calif., Pay Pensions Backfired

Stockton Police

Jeffrey A. Michael, a finance professor in Stockton, Calif., took a hard look at his city’s bankruptcy this summer and thought he saw a smoking gun: a dubious bond deal that bankers had pushed on Stockton just as the local economy was starting to tank in the spring of 2007, he said.

 

Bill to delay cities' bankruptcies put on hold

Senate President Pro Tem Darrell Steinberg (D-Sacramento) says it's too early to make changes in a mediation process for municipalities seeking to file for protection. Legislation that could have delayed some municipal bankruptcies has been tabled after being opposed by the mayors of California's largest cities, including Los Angeles' Antonio Villaraigosa.

 

Bankrupt San Bernardino must cut spending by a third

San Bernardino must cut government spending by a third, almost assuredly resulting in widespread layoffs or pay reductions for city workers, as it prepares to officially file for bankruptcy protection, city officials said.

 

San Bernardino declares fiscal emergency ahead of bankruptcy filing

San Bernardino leaders' decision means the city could avoid months of state-mandated mediation as it seeks bankruptcy protection. The San Bernardino City Council on Wednesday declared a fiscal emergency, an acknowledgment that the city is nearly broke and a legal maneuver that will allow leaders to file for bankruptcy protection without going through months of state-mandated mediation.

 

Authorities probe bankruptcy-bound San Bernardino, Calif.

The Sheriff's Department said Thursday it was working with police and the district attorney's office to investigate possible criminal activity within the government of San Bernardino, where city officials voted this week to take the rare step of filing for bankruptcy.

 

San Bernardino files for bankruptcy protection

San Bernardino Bankrupt

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.

 

Mammoth Lakes, California files for bankruptcy

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.

 

How Stockton went broke: A 15-year spending binge

Stockton

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.

 

Analysis: Stockton, California new paradigm for struggling cities

Stockton

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.

 

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