Calpensions today posted a piece bearing this headline: “Pensions still cloud Stockton bankruptcy exit.” An excerpt:
“Among the problems for Judge Klein if he looks at whether the Stockton exit plan might lead to a second bankruptcy: Future pension costs, varying with investment earnings and other factors, are difficult to predict with much precision.
“Federal bankruptcy courts can overturn labor contracts, as happened with an electrical workers union contract in the Vallejo bankruptcy. But CalPERS argues that it’s an arm of the state, and a bankruptcy court cannot interfere with state-local government relationships.
“Last week, (City Manager Kurt) Wilson said Stockton could emerge from bankruptcy as soon as June 30 if the judge approves the exit plan. If the plan is rejected, he said, the bankruptcy could be extended another four to six months, delaying an exit until the end of the year.”
To read the full article, click here.