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Chapter 9 Bankruptcy

Bankruptcy Court Schedule

The Court will hold a Status Conference on June 12, 2013.  Creditors and parties in interest are invited to attend the status conference 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.

 

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 at (209) 937-8827 or Connie.Cochran@stocktongov.com.

 

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.

 

A court reporter's transcript of the Judge's findings of fact and conclusions of law is provided below.  The Judge will issue his written opinion in the coming weeks:

 

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 what expenditures will be reduced or suspended.  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. 

 

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 $521 million includes $366 million in restricted funds, which cannot be used to resolve the General Fund crisis.  The $155 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.  The letter has been submitted by Mayor Ann Johnston on behalf of the City Council. 

 

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

Legislative Analyst Bankruptcy Q&A

 

This City of Stockton web page last reviewed on --- 4/30/2013