CRS Statement on Ruling Against Wall Street Creditors in Stockton Bankruptcy Case

April 1, 2013

For Immediate Release
Monday, April 1, 2013

Following is a statement from Californians for Retirement Security chairman Dave Low on new ruling against Wall Street creditors in Stockton bankruptcy case:

"This ruling once again shows that greed is driving the large Wall Street corporations who in this case sought to further slash retirement security for police and other public employees to better their bottom lines. Ironically, these Wall Street bankers and bond houses are some of the same people who caused the financial crisis that crippled cities like Stockton. Now they want to blame public employees, so they can get more of their money back.

In today's ruling, U.S. Bankruptcy Judge Christopher Klein agreed that the Stockton bankruptcy was not driven by pensions, saying a host of decisions and circumstances led to the city's financial woes including developments and tax breaks that could not be sustained because of the housing crisis and recession.

Of the Wall Street creditors, the judge said: "The translation (was that) if you don't intend to impair CalPERS, we're not going to talk to you ... They absented  themselves from all discussions....And, having voted with their feet,  there was no point in talking to them further." According to the Sacramento Bee: "The judge ruled that Stockton had put forth a reasoned effort to resolve its massive fiscal debt but received "nothing but a stonewall on the other side." He also chastised the city's creditors for refusing to pay their required share of costs of pre-bankruptcy mediation, declaring, "The capital market creditors did not negotiate in good faith. And therefore, they do not have the ability to complain."

Read coverage of the ruling at: