Judge approves California city bankruptcy petition (Vallejo, CA)

[UpInArms]

Source: Reuters

SAN FRANCISCO, Sept 5 (Reuters) - A U.S. judge ruled on Friday that Vallejo, California, was insolvent when it filed a bankruptcy petition in May, siding with the city's bid to seek protection from creditors while aiming to restructure its debts in bankruptcy court.

"This gives us the opportunity to negotiate with our creditors and to emerge from bankruptcy and become solvent over the long term," Marc Levinson, a partner at Orrick, Herrington & Sutcliffe who represents Vallejo, said shortly after the ruling was signed.

"We are legitimately in bankruptcy, which is what we always said we were and the unions, who said we had buckets of money to tap, were wrong," Levinson added, referring to the legal challenge by city employees against the bankruptcy petition.

<snip>

The state's last governmental bankruptcy filing was in 1994 when Orange County's finances ran aground on soured investments linked to derivatives.

By contrast, Vallejo's main financial difficulty has been its high spending on public safety employees, whose costs account for three-quarters of the city's general fund, amid sliding revenues linked to the housing slump.

Read more: http://www.reuters.com/article/bondsNews/idUSN0529542020080905?sp=true

[Taverner]

1. WTF??? They have 6 Flags and no-one else does????

Why should they have easier terms than the rest of us?