Jun 26 2012

City of Stockton is the Largest U.S. City to File for Bankruptcy?


From the City of Stockton

Apparently, Stockton will file today or shortly thereafter.

Stockton, California was poised on Tuesday to take a major step toward becoming the largest U.S. city ever to file for bankruptcy after talks with its creditors on Monday at midnight.

Negotiations aimed at averting bankruptcy may press on informally, the city’s spokeswoman said, adding that city officials would next discuss any moves toward bankruptcy at the city council meeting on Tuesday evening.

The council’s main order of business will be taking up and voting on a proposed budget to guide Stockton during bankruptcy, an option city officials have been considering since February.

City Manager Bob Deis, who the council has authorized to file for Chapter 9 bankruptcy, last week unveiled the budget proposal, also known as a pendency plan.

The plan assumed Stockton, a city of 292,000 people about 85 miles (about 135 km) east of San Francisco, would fail to win concessions from its 18 creditors to close its $26 million shortfall for the fiscal year beginning on July 1.

The California economy remains sick and voters are paying for the housing bubble bust and largess to Public Employee Unions who dominate the California Legislature.

Sooner or later Californians will insist on real government reform and budget restraint.

Some day…..