Stockton, California, to file for bankruptcy, will be largest U.S. city to fail

Posted by Kendall Harmon

Stockton, California--This Gold Rush-era port city, an epicenter of California's agricultural exports, will become the nation's largest city to seek protection under the U.S. bankruptcy code after its City Council on Tuesday stopped bond payments, slashed employee health and retirement benefits and adopted a day-to-day survival budget.

City Manager Bob Deis likened the process to cutting off an arm to save the body. He is expected to file bankruptcy papers immediately.....

Stockton..[had] been in negotiations with its creditors since late March under AB 506, a new California law requiring mediation before a municipality can file for reorganization of debt. It was the first use of the law, and policy analysts who watched its torturous and tedious progress have titled their report on it "Death by a Thousand Meetings." Mediations ended Monday at midnight.

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Filed under: * Culture-WatchLaw & Legal Issues* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsHousing/Real Estate MarketLabor/Labor Unions/Labor MarketTaxesThe Banking System/SectorThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Politics in GeneralCity Government

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Posted June 27, 2012 at 5:15 am [Printer Friendly] [Print w/ comments]
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