Stockton sales tax plan set to end bankruptcy, pensions sparedCategories: California Developments
Reuters by Jim Christie, November 4, 2013
When Stockton, California, filed for bankruptcy last year, the stage was set for a precedent-setting battle with Wall Street over whether bondholders or retired public employees should pay the price when a local government goes broke.
But under the terms of recent settlements, bond insurers who are backing about $240 million in city debt will accept a “haircut” of as much as 50 percent on some bonds. Retirees will keep their full pensions, though 1,100 of them will lose their retiree health insurance.