Bankrupt Cities

Judge Rules Stockton's Pensions May Be Cut in Bankruptcy

A major blow against the sanctity of public employee pensions in California

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In a potentially groundbreaking decision, a federal bankruptcy judge today struck down the sanctity of government pensions in California, saying the city of Stockton has the right to sever its contract with CalPERS.

The verbal ruling from U.S. Bankruptcy Judge Christopher Klein, two years after Stockton filed for bankruptcy, was the decision CalPERS longed to avoid. For the first time, a judge in California has said a city or county can walk away from its CalPERS obligations, the way a bankrupt retail chain can exit a bad lease at a shopping center.

Whether Stockton would sever its CalPERS contract is another matter. City Manager Kurt Wilson told the Sacramento Bee that there's no change in the city's plan to keep paying CalPERS in full and retaining its full pensions. The city's attorney, Marc Levinson, spent the afternoon trying to convince Klein to approve Stockton's financial reorganization plan even with the CalPERS relationship left untouched.

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  1. Fuck CalPERS and the whole criminal gang that runs the public pension system in CA. They think they deserve special treatment not available to those of us in the private sector. We’ll turn it over to the PBGC, sit back and enjoy the show.

    1. It’s no wonder CA is going bankrupt. The fools in the state and local government’s are out of control.

  2. my buddy’s ex-wife makes $70 hourly on the computer . She has been out of a job for 8 months but last month her pay was $20730 just working on the computer for a few hours. check out the post right here….

    ???? http://www.netjob70.com

  3. …”For the first time, a judge in California has said a city or county can walk away from its CalPERS obligations, the way a bankrupt retail chain can exit a bad lease at a shopping center.”…

    That was a federal judge also.
    The CalPERS blood-sucking parasites can pound sand.

  4. They were seeking, as always, to throw responsibility for the impossibly generous payouts agreed to by the gutless city onto the taxpayers of California. Then, if that river of money dried up, onto the federal government (taxpayers).

    Bad news for Detroit and all the other public employee unions for whom this was the endgame, too. Sux for them.

    Having always thought they’d found a class of entities whose employees could be unionized but could NOT be driven out of business (government) no matter how ruinous the benefits they had wrangled/extorted/negotiated, they now find that they really DON’T have any kind of federal guarantor for those benefits. Turns out they CAN drive their employer into bankruptcy, and their ‘far above private sector’ bennies will be gone…like tears…in rain.

    Haaaahahahaha!!!

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