Largest U.S. Municipal Bankruptcy Pending For Stockton

Stockton, a city of 300,000 in California's ailing Central Valley, may become the largest city in the U.S. to declare bankruptcy. Agreements with public employee unions and major bond creditors may be all that stand in the way of default.

1 minute read

March 1, 2012, 2:00 PM PST

By Irvin Dawid


Stockton already captured headlines in Forbes' compilation of "Urban Affairs: America's Most Miserable Cities", capturing first place for two years. It also "has the second-highest foreclosure rate in [the] nation".

"Stockton, about an 80-mile drive east of San Francisco, boomed a decade ago, as eager buyers from Silicon Valley bought up homes in the area. But in the past several years, housing values have plummeted, and the city has steadily had one of the highest foreclosure rates in the country," writes Jennifer Medina.

"During a contentious meeting that stretched late into the night (on Feb. 28), the City Council decided, nearly unanimously, to begin mediation with public employee unions and major bond creditors in what is widely seen as the city's last-ditch attempt to restructure its finances outside of bankruptcy. Facing a budget deficit from $20 million to $38 million on a budget of roughly $165 million, the Council declared a fiscal emergency for the third year in a row."

Thanks to Gladwyn d'Souza

Thursday, March 1, 2012 in The New York Times - U.S.

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