Judge Lets Stockton, Calif., Proceed With Ch. 9 Filing

Law360, Los Angeles (April 1, 2013, 8:00 PM EDT) -- A California federal judge on Monday ruled that creditors couldn’t stop the city of Stockton from seeking Chapter 9 relief, saying bond insurers didn’t negotiate in good faith, green-lighting the city for one of the largest-ever U.S. municipal bankruptcies.

The decision comes less than a week after the end of a three-day trial and U.S. Bankruptcy Judge Christopher Klein's decision to schedule an oral ruling on Stockton’s eligibility as a debtor.

Judge Klein on Monday found that Stockton was eligible to pursue Chapter 9 bankruptcy and...
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