Stockton’s Case Will Soon Be Over But California’s Pension Problem Will NotJune 9, 2014 – In The News
Michael A. Sweet was quoted in the Debtwire article, "Stockton’s Case Will Soon Be Over But California’s Pension Problem Will Not." Full text can be found in the June 9, 2014, issue, but a synopsis is noted below.
In the aftermath of Stockton’s confirmation hearing, pensions remain the biggest question in California’s public policy.
Negotiations between San Bernardino and the California Public Employees Retirement System (CalPERS) have been going on since August 2013, when a bankruptcy judge granted the city protection under Chapter 9.
Although mediation is taking longer than expected, creditors cannot move forward with a competitive plan of debt adjustment (PDA) in a Chapter 9, said Michael Sweet.
According to Sweet, the latest developments in Stockton’s case, especially regarding the “feasibility test” of Stockton’s PDA, could affect mediation in the San Bernardino bankruptcy.
It is possible that CalPERS will work harder to get to a place where there is a consensual PDA for San Bernardino’s bankruptcy, which may include certain aspects of CalPERS’ impairment, Sweet said.