Calif. City Uses New Law To Negotiate With Creditors

Law360, New York (February 29, 2012, 3:33 PM EST) -- Facing a $15 million deficit this year and a possible $38 million hole for fiscal year 2012-13, city managers in Stockton, Calif., voted Tuesday to invoke a new California law allowing them to negotiate with creditors to avoid a bankruptcy.

The late night 6-1 vote lets the city of 290,000 in California's agriculturally rich Central Valley, which perhaps is best known for its asparagus festival, sit down with creditors holding claims exceeding $5 million in an attempt to mediate its fiscal crisis outside of a Chapter 9...
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