Stockton Heading To Bankruptcy Court Monday
Don't Miss This
- Yuba City Officer, Woman Shot Overnight
- Roseville Cuddling Business In High Demand As Holiday Season Approaches
- Woodland Police Acquire MRAP Rejected By Davis City Council Amid Police Militarization Debate
- 49ers Fan Who Bought Game Ticket Online Receives Pricey Parking Pass
- Man Faces Jail Time Or $4,000 Fine For Not Watering Lawn
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.