San Bernardino Defends its Eligibility for Chapter 9

San Bernardino officials didn’t even have a chance to file a pendency plan in bankruptcy court before receiving backlash from the city’s largest creditor, the California Public Employees’ Retirement System.  San Bernardino is the first insolvent California city to fail to remain current on pension payments while in bankruptcy.  In the Chapter 9 case involving Stockton, insurance companies filed motions against the city as it remained current on its CalPERS payments while defaulting on its bonds.  San Bernardino could break ground in other ways, because CalPERS’ decision to file the motion is the opening move in what could be a precedent setting case…The case could determine what happens with the CalPERS contract, which is currently protected by the state’s constitution, said Karol Denniston, a partner in the San Francisco office of law firm Schiff Harding.

Bond Buyer


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