Stockton Heading To Bankruptcy Court Monday
Don't Miss This
- Women Respond To Ice Bucket Challenge By Raising Money For California Town With Dry Wells
- Stockton Man Pleads For Return Of Dog Stolen From His Car
- Sketch Released Of Suspect Wanted For 2 Stabbings Near Downtown Sacramento
- Roseville Woman Run Over By Own SUV, Dies
- U-Haul Crashes Into Citrus Heights Home, Hitting Baby’s Room
Get Breaking News First
STOCKTON, Calif. (AP) — After years of struggles, Stockton is poised to become the most populous in the nation to enter bankruptcy when its trial begins Monday in federal court.
Creditors who lent Stockton money are challenging its Chapter 9 bankruptcy petition, but most observers say there’s no doubt the city of 300,000 will be successful.
Its largest creditors are bond insurers who helped the city refinance pension debt. They will argue that Stockton is solvent and hasn’t cut spending enough.
For years Stockton’s salaries, benefits and borrowing were based on anticipated long-term developer fees and increasing property tax revenue. But those were lost in a flurry of foreclosures.
The city has become emblematic of both government excess and the financial calamity that resulted when the nation’s housing bubble burst.
Copyright 2013 The Associated Press.