webstationlogos3 KHTK-sports-1140_FINAL-social_125x35b
BREAKING: Semi truck accident injures 3 workers in Fix 50 area. Details
FIX 50: Lane Closures And Alternate Routes | LIVE Traffic Map | More Info

Local

Stockton Heading To Bankruptcy Court Monday

View Comments
Don't Miss This

Get Breaking News First

Receive News, Politics, and Entertainment Headlines Each Morning.
Sign Up

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.

View Comments
blog comments powered by Disqus