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Author: yodaorange Big red star, 1000 posts Feste Award Nominee! Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 459793  
Subject: Big day in CA pension vs bondholders Date: 12/21/2012 10:17 AM
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Calpers has sued San Bernardino saying that it was illegal for them to stop paying for their pensions. You might recall that San Bernardino STOPPED sending in their regular payments to Calpers. This was a precedent since Stockton CONTINUED to pay Calpers.

The issue is whether Calpers has a higher standing in bankruptcy compared to other creditors. Calpers argues they yes, bond holders argue no.

A bankruptcy judge, Meredith M. Jury, will hear the case today in Riverside, California.

This is a SIGNIFICANT case. If municipalities can get out of their pension obligations by declaring Chapter 9 bankruptcy, the floodgates will open. Or the unions would re-negotiate lower pensions.

Both Calpers and bond insurers have said they will fight until the Supreme Court ultimately decides. Expect a long fight. . .


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