UOP Business Forecasting Center: Bankruptcy trial outcome ‘very uncertain’

You can read the one-page article here.

An excerpt:

Judge Klein may confirm Stockton’s plan on October  1, but what happens if he does not? The Judge could find that the City’s plan discriminates unfairly against Franklin, and he may also reach a conclusion that opens the door for Stockton to reduce pensions but he can’t compel the City to go through that door. Even if the Judge gives Stockton an opening to impair pensions, City leaders have made it clear that they have no desire to go in that direction. It is most likely that the City would simply amend its plan to offer Franklin a repayment of around 50%, roughly proportional to the recovery from fixed payments in the City’s settlement on its over $100 million in unsecured pension bonds. The City would have a strong case that such an offer is fair, and would hopefully be able to still avoid a long and costly court battle over the pension issue.

Regardless of the decision on October 1, the bankruptcy case is costing the City more time and money than it originally planned when it put forward its plan and the City’s voter approved the ¾ cent sales tax last November known as Measure A. The City continues to have problems retaining its experienced police officers, has not yet been able to increase its police force with Measure A funds, and is facing pressure to increase compensation to bolster its recruitment and retention efforts. As a result, it appears that Stockton will have a difficult time increasing its police force by all of the 120 officers promised to voters in the Measure A campaign.

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