Ruling expected Monday in Stockton bankruptcy trial

4:43 PM, Mar 27, 2013   |    comments
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Stockton waterfront

SACRAMENTO, CA - Testimony has concluded in the Stockton bankruptcy trial in U.S. Bankruptcy Court in Sacramento.

The final witness, appearing for the objecting creditors, was city council member Kathy Miller.  Miller was asked why the council didn't consider tax increases instead of voting to take the city into bankruptcy.  Miller testified residents of Stockton made it clear to her they wouldn't support a tax increase.

Stockton is trying to prove to Judge Christopher Klein that it is insolvent, and that further cuts to city services would harm the safety of citizens.

Creditors argued that Stockton could have raised taxes or sold city assets to avoid the bankruptcy process. They also said Stockton should have negotiated lower pension payments into the CalPERS system, or left the system all together.

City officials claimed the penalty for leaving CalPERS would have cost the city nearly a billion dollars.

City Manager Bob Deis testified on Monday, while other city finance officials appeared in court Tuesday.

STORY: Stockton bankruptcy trial underway

With much of the testimony in written declarations, Klein said he will need more time to consider the arguments and make his ruling. He expects to make his ruling on Stockton's eligibility for bankruptcy on Monday.

If Stockton is eligible for bankruptcy, the city then produces a plan of adjustment, which involves negotiating much smaller payments to the creditors it's currently battling in court.




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