Posted: Feb 26, 2013 4:25 PM by Associated Press
SACRAMENTO, Calif. (AP) - Stockton officials will be in court next month where a federal bankruptcy judge will determine if the city is eligible for Chapter 9 bankruptcy protection from its creditors.
U.S. Bankruptcy Judge Christopher Klein set aside four days beginning on March 25 for hearings where the city will have to prove it has negotiated in good faith with a long list of creditors.
Creditors opposing the city's bankruptcy filing - including bond insurers - will argue that Stockton officials have not shown they've done all they can to reduce spending.
Stockton was hit hard by the foreclosure crisis and lost millions in tax revenue. The city has cut a quarter of its police force and more than $90 million from its budget over three years.
The city of nearly 300,000 in California's San Joaquin Valley filed for bankruptcy protection last summer.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
2/26/2013 3:55:54 PM (GMT -8:00)
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