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Chapter 9 Bankruptcy

Bankruptcy Court Schedule

Chief United States Bankruptcy Judge Christopher Klein conducted the trial on confirmation of the City's Proposed Plan of Adjustment, as amended (also known as the "Exit Plan") on May 12 - 14, 2014.  The matter was continued to Wednesday, June 4, and, at the conclusion of the hearing, Judge Klein scheduled July 8, as a hearing date to rule on the value of collateral provided to creditor Franklin High Yield.  At the July 8, 2014, hearing, the Judge provided direction related to CalPERS and requested additional briefings from any and all parties.  The next hearing is scheduled for Wednesday, October 1, 2014, at 10a.  Creditors and parties in interest are invited to attend but are not required to do so.  

 

For information about the Court and the Court schedule, please view the Court web site listed under External Links below and view the Court calendar for Judge Christopher M. Klein.

 

Plan of Adjustment and Disclosure Statement

The Stockton City Council approved agreements with creditors under the City's bankruptcy Plan of Adjustment, April 15, 2014, at the regularly scheduled Council Meeting, under item 15.2:

At a Special Meeting on October 3, 2013, the Stockton City Council approved a Proposed Plan of Adjustment and Disclosure Statement for Submittal to Bankruptcy Court.  The Plan and Disclosure Statment were filed with the court on October 10, 2013.

 

On November 18, 2013, the court approved the City's Modified Disclosure Statement and First Amended Plan of Adjustment of Debts.   

Bankruptcy Court Notices

Periodically, the Bankruptcy Court will mail creditors and other interested parties notices of upcoming hearings and of other developments in the chapter 9 case.  If you have questions about these notices, please contact the City of Stockton Public Information Officer. 

 

Stockton Bankruptcy Information

On June 28, 2012, the City of Stockton filed a petition for chapter 9 bankruptcy protection with the United States Bankruptcy Court, Eastern District of California, Sacramento, Case No. 2012-32118.  Judge Christopher M. Klein ruled on Monday, April 1, 2013, approving the petition and providing bankruptcy relief for the City of Stockton General Fund. 

With the bankruptcy petition approved, the City will focus on continuing to work with creditors toward a Plan of Adjustment.  The Plan of Adjustment, which must be confirmed by the court, confirms the terms and conditions of payment of debt with the limited financial resources available.  The restructuring of debt and other City obligations is essential to restoring fiscal health and moving the City forward to a sustainable future.

 

The Stockton City Council approved a Pendency Plan on June 26, 2012.  The Pendency Plan is essentially the budget and the financial plan that is followed for the day-to-day operations of the City while in bankruptcy.  It identifies reduced or suspended expenditures.  The City will continue to pay employees, vendors and service providers.  The focus of the City's plan is the restructuring of above market pay and benefits and unsustainable long term debt. 

 

On April 1, 2013, the Judge ruled that Stockton is eligible for Chapter 9 bankruptcy protection.  The City will file a Plan of Adjustment with the bankruptcy court in September.  The City Council adopted a Fiscal 2013-2014 Annual Budget as part of the City's Pendency Plan on June 25, 2013.  To view this budget and budgets for prior years, please view the Budget web page.

 

Financial Disclosures

City of Stockton Material Events Notices (MEN) are available on the EMMA (Electronic Municipal Market Access) web site.  A link to the EMMA web site is provided under External Links below.

 

Majority of City's Budget Not Part of Bankruptcy

The majority of the City's budget is not impacted by the City's fiscal crisis.  The total budget of $633 million includes $450 million in restricted funds, which cannot be used to resolve the General Fund crisis.  The $183 million General Fund provides for services such as police, fire, libraries, parks maintenance and administrative functions.  The Pendency Plan will protect these essential services for the safety and welfare of our citizens. 

 

An Open Letter to the Community - Stockton's Bankruptcy

On July 24, 2012, the Stockton City Council approved an Open Letter to the Community regarding Stockton's Bankruptcy.  

 

City AB 506 Restructuring Proposal

City Pendency Plan

 

Employee Communications

  • Employee Letter - October 1, 2012, City Bankruptcy Update and State Approved pension Changes

 

Media Information

 

Retiree Communications

  • Retiree Letter - June 27, 2012, Retiree Health Care Letter
  • Retiree Letter - July 16, 2012, Information and resources for retirees receiving medical benefits 

 

Vendor Communications

 

Questions

The State of California Legislative Analyst's Office (LAO) has published questions and answers about Local Government Bankruptcy in California. A link to the report is available under External Links below.

 

If you have questions, concerns, comments or suggestions, please submit your request in writing by completing an Ask Stockton service request form.

 

 

External Links


United States Bankruptcy Court, Eastern District of California

EMMA (Electronic Municipal Market Access)

Legislative Analyst Bankruptcy Q&A

 

This City of Stockton web page last reviewed on --- 7/9/2014