The city of Stockton, California announced last Friday the formalization of deals to open settlement proceedings with two major creditors. This is said to be the 'beginning of the end' for the city's bankruptcy case.
The said deals may also avert major litigation promised by the city's creditors and bond insurers. This group had opposed the allowance of the city of Stockton into bankruptcy. This group also threatened to bring in state pension fund Calpers into the legal dispute with the city.
In the draft plan for its exit from bankruptcy, Stockton had said it 'outlines of a negotiated settlement' with bond insurer Assured Guaranty. The insurer holds over USD124.3 million in outstanding pension obligation bonds that the city had targeted for its losses.
Another part of the draft plan was the preliminary deal with bond insurer National Public Finance Guarantee for USD45.1 million in outstanding lease revenue bonds for the city arena that remains in dispute.
The draft had said, "As this document is being finalized, the City was in negotiations with his creditor and had developed the outlines of a negotiated settlement."
Join the Conversation