Skip to main content

You are here

Advertisement

San Bernardino Bankruptcy May Proceed

A federal bankruptcy court ruled this week that the city of San Bernardino’s bankruptcy filing may proceed amid arguments by CalPERS, the state pension fund. A city of 210,000 residents 60 miles east of Los Angeles, San Bernardino was the first entity to stop paying CalPERS, although it recently resumed doing so. The city has $46 million in debt, mostly to bond holders who argue that CalPERS should be treated like other creditors. About $50 million is owed to pensioners.

The San Bernardino case is being watched closely by other similarly situated cities like Stockton and Detroit, with some predicting that the issue of whether federal bankruptcy law trumps state pension statutes will need to be decided by the U.S. Supreme Court.

Advertisement