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 case.
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)