Reuters: Bankruptcy News: Stockton, Calif. becomes largest US city to file for bankruptcy

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Stockton, Calif. becomes largest US city to file for bankruptcy Jun 29th 2012, 01:10 By Jim Christie June 28 | Thu Jun 28, 2012 9:10pm EDT June 28 (Reuters) - Stockton, California became the largest city to file for bankruptcy in U.S. history on T hursday, after decades of fiscal mismanagement and a housing-market crash left it unable to pay its workers, pensioners and bondholders. The filing followed three months of confidential talks between Stockton and its creditors aimed at averting bankruptcy. The negotiations ended on Monday with the city failing to win enough concessions to help close its shortfall for the fiscal year starting on July 1. The city of nearly 300,000 in California's Central Valley becomes the nation's most populous to file for Chapter 9 bankruptcy. Jefferson County, Alabama, still remains the biggest in terms of debt outstanding, as it had a debt load exceeding $4 billion when it filed in 2011. Stockton has about $700 million in bond debt. Stockton has suffered a sharp drop in revenue since the collapse of its once red-hot housing market. The housing boom transformed the farming city into a distant bedroom community of the San Francisco Bay area, and the bust put it at or near the top of national foreclosure rankings in recent years. Link this Share this Digg this Email Reprints

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