Stockton's Ch. 9 Plan A Test Case For Coping With CalPERS

Law360, New York (April 2, 2013, 9:15 PM EDT) -- Now that Stockton, Calif., has a bankruptcy judge’s blessing to move forward with its Chapter 9 proceedings, experts say the city’s daunting task of drafting a confirmable restructuring plan will put to test an insolvent municipality’s ability to puncture the California pension system.

Stockton, in what is the largest municipal bankruptcy the country has ever seen, is trying to avoid reducing its $900 million liability to the California Public Employees' Retirement System, its largest creditor. The city has argued that under California law, it must pay...
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