February 26, 2013 / 10:56 PM / 5 years ago

Trial on Stockton, California's bankruptcy eligibility next month

SACRAMENTO, Calif., Feb 26 (Reuters) - The federal judge overseeing the municipal bankruptcy case of Stockton, California on Tuesday ordered a trial next month over the issue of the city’s eligibility to pursue bankruptcy protection from its creditors.

Chief Bankruptcy Judge Christopher Klein said Stockton and creditors contesting its bankruptcy filing could present evidence and witnesses on the eligibility issue during a four-day trial during the week beginning on March 25.

Stockton, a city of 300,000 in California’s Central Valley, last year became the biggest U.S. city to file for bankruptcy.

Bond insurers National Public Finance Guarantee Corp and Assured Guaranty have more than $350 million in exposure to Stockton’s debt and are contesting the city’s plan to restructure its finances through bankruptcy court.

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