Stockton bankruptcy judge says city's collateral not worthless

SACRAMENTO, Calif., July 8 Tue Jul 8, 2014 6:01pm EDT

SACRAMENTO, Calif., July 8 (Reuters) - The judge in Stockton, California's bankruptcy on Tuesday ruled that the city has collateral worth $4.052 million with which it could pay holdout creditor Franklin Templeton, dismissing the city's contention its collateral was worthless.

The city's collateral against bonds held by Franklin includes two golf courses, a community center and a park, which the city had estimated had no value while Franklin had pegged their value at $6.12 million to $17.34 million.

At the same time, U.S. Bankruptcy Judge Christopher Klein said he would make no ruling on Tuesday on whether the California Public Employees' Retirement System, or Calpers, should be made to accept less than the entire amount it is owed while bondholders take losses in the case. (Reporting by Robin Respaut; Writing by Dan Burns)