SACRAMENTO May 15 The judge in the bankruptcy
case for the city of Stockton, California, on Thursday extended
the trial by a day to allow more time to hear argument in the
On what initially was scheduled as the final day of a
four-day trial to determine whether the northern California city
is ready to exit Chapter 9 bankruptcy protection, U.S.
Bankruptcy Judge Christopher Klein reluctantly agreed to give
the case one more day of trial. After the conclusion of
Thursday's proceedings, the case will recess for two weeks and
resume for a final day on May 29.
Klein is poised to determine if Stockton's proposed debt
adjustment plan, a blueprint at the center of its
municipal bankruptcy case, is fair and feasible.
Stockton has attracted the attention of the $3.7 trillion
municipal bond market for its treatment of major creditors and
pension obligations. To date the trial has focused mainly on a
single holdout creditor, two funds managed by Franklin Templeton
Investments, which the city has proposed to pay less than a
penny on the dollar.
Earlier this week, Klein announced he would decide if the
country's largest pension fund, Calpers, could share losses
similar to other creditors in Chapter 9. A ruling that the
California Public Employees' Retirement System could be impaired
would be unprecedented in California.
(Reporting by Robin Respaut; Editing by Lisa Shumaker)