San Bernardino Bankruptcy Gets Green LightAugust 28, 2013 – In The News
Michael Sweet was quoted in the CNN Money article "San Bernardino Bankruptcy Gets Green Light." While the full text can be found in the August 28, 2013, issue of CNN Money, a synopsis is noted below.
A federal bankruptcy judge has rejected an attempt to kick the city of San Bernardino, California, out of bankruptcy court, a ruling that could affect the bankruptcy filing in Detroit.
California Public Employees’ Retirement System (CalPERS) had challenged the eligibility of the city, arguing that officials had not made a good faith effort to reach an agreement with creditors. The question of “good faith negotiations” is also an argument being made by employee pension funds in the Detroit case.
Michael Sweet said the ruling makes it less likely similar challenges to Detroit’s bankruptcy case will be upheld, but that this is not a final decision on whether bankruptcy can be used to impose cuts in pension benefits.
“If a judge says you can use bankruptcy to [cut what is owed] to CalPERS, then everyone will line up to do it,” Sweet said.