Iceland Dismantles Corrupt Gov't Then Arrests All Rothschild Bankers...

Iceland Dismantles Corrupt Gov't Then Arrests All Rothschild Bankers...

Stockton, CA Filed for Bankruptcy, but What's Next?

Stockton, California files for bankruptcy

By Jim Christie
SAN FRANCISCO | Thu Jun 28, 2012 11:49pm EDT
(Reuters) - Stockton, California, became the largest city to file for bankruptcy in U.S. history on Thursday after years of fiscal mismanagement and a housing market crash left it unable to pay its workers, pensioners and bondholders.

The filing by the city of 300,000 people followed three months of confidential talks with its creditors aimed at averting bankruptcy.

"We are now a Chapter 9 debtor," Marc Levinson, the lawyer who filed the city's voluntary petition in the Eastern District of California, in Sacramento (Case 12-32118) told Reuters.

Pleadings in support of Stockton's eligibility for Chapter 9 bankruptcy will be filed on Friday, Levinson said.

Stockton, which officially declared insolvency and its desire to restructure its debt, also filed a separate list of its major unsecured creditors.

The California Public Employees' Retirement System, which manages Stockton's pension plan, tops the list. The retirement system has a $147.5 million claim for unfunded pension costs.

Other top creditors include investors holding $124.3 million of Stockton's pension obligation bonds, $40.4 million of the city's variable rate demand obligations, $35.1 million of the city's public facilities fees bonds and $31.6 million of the city's parking garage debt.

Wells Fargo Bank NA is listed as the trustee for the investors.

"We are extremely disappointed that we have been unable to avoid bankruptcy," Mayor Ann Johnston said in a statement. "This is what we must do to get our fiscal house in order and protect the safety and welfare of our citizens."

Negotiations with creditors ended on Monday with Stockton failing to win enough concessions to help close its budget shortfall for the fiscal year starting on July 1. The city will also file a motion to request permission to share information from the confidential mediation process.

HEALTHCARE TO BE PHASED OUT, PENSIONS UNCHANGED

The Chapter 9 bankruptcy filing, a rare event for U.S. municipal debt issuers, was left as the only option to close a deficit of $26 million in Stockton's budget for its the new fiscal year, according to city officials.

The budget approved on Tuesday by Stockton's city council suspends $10.2 million in debt payments and cuts employee compensation and retiree benefits by $11.2 million to help close the deficit.

About $7 million in savings would come from cutting retiree medical benefits for one year.

While the retiree medical benefits will eventually be eliminated, Stockton plans to leave its public pensions unchanged while in bankruptcy proceedings. Attempts to pare them would invite long and expensive challenges.

City Manager Bob Deis said he was out of options to balance the city's budget after deep cuts in recent years to Stockton's work force. City leaders rejected further cuts to the police department as Stockton is experiencing a surge in violent crime.

The city will maintain current levels of public services, although at the cost of Stockton shedding its retiree medical program and defaulting on more of its bonds, Deis told Reuters.

Stockton has already defaulted on about $2 million in debt since February, allowing the trustee for one of its bond insurers to seize a building once slated to be its future city hall and three parking garages.

"We need to spread the pain. What's left are creditors, our bondholders and retirees," Deis said.

Stockton has suffered a sharp drop in revenue since the collapse of its once red-hot housing market, forcing it to cut more than $90 million in spending in recent years.

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.

Stockton becomes the nation's most populous city to file for Chapter 9 bankruptcy. But Jefferson County, Alabama, remains the biggest municipal bankruptcy 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.

Standard & Poor's Ratings Services downgraded Stockton to default from selective default on Wednesday, citing the city's move toward bankruptcy and expectations that it will not substantially pay all of its obligations as they come due.

Moody's Investors Service on Wednesday cut to 'Caa3' various general fund-supported debts of the city, putting the ratings in the "substantial risk" category, one notch above the "may be in default, extremely speculative" grouping. Moody's said its move was based on Stockton's bankruptcy budget.

(Reporting by Jim Christie, Hilary Russ and Joan Gralla; Editing by Tiziana Barghini and Stacey Joyce)

Quote of the Day

REVOLUTION USA 2012 - "There comes a time when one must take a position that is neither safe, nor political, nor popular, but he must take it because his conscience tells him that it is right." ~ Martin Luther King

Man Allegedly commits 10 felonies in 9 hours

By Eric Pfeiffer

One man traveling through Tennessee allegedly completed a crime spree with such urgency that even local police say they'd never seen anything like it.

William Todd, 24, is accused of committing 10 felonies in just nine hours while going on a "terror" through Nashville.
"He was just on a terror. I've never seen anything like this before," Sgt. Tony Blackburn, told WSMV.

Todd is not even a native of Nashville. Police say he traveled there on a Greyhound bus from Kentucky before beginning his unprecedented crime spree. Upon arriving in Nashville, he allegedly broke into a local business called The Slaughterhouse, where he stole a Taser, revolver and shotgun. He then proceeded to steal a T-shirt from the Slaughterhouse before burning the business to the ground.

Todd then moved on to a local bar, where he held four patrons at gunpoint. He robbed all four individuals but not before using the Taser on one and pistol-whipping another.

Just five minutes later, Todd moved onto his next alleged felony, carjacking a taxi driver at gunpoint. After leaving the cab, he used the credit cards he had stolen from the bar patrons to buy food.

"He was able to find the Walmart on Nolensville. He goes there and purchased $199 worth of items," Sgt. Blackburn said.
And that was only the beginning.

In the early hours of the following morning, Todd then broke into a local hotel's law office. He not only vandalized the offices but also then defecated on a desk and smeared his feces on some of the framed law degrees.

Leaving the offices, Todd then reportedly robbed several of the hotel guests. He knocked on their door pretending to be a female housekeeper, then robbed them at gunpoint. He was also reportedly crying while doing so.

He then briefly paused for a change in personal appearance.

"We have him on video leaving the hotel with a shaved head," Sgt. Blackburn said.

After crashing his stolen cab into a local parking garage, Todd then quickly held another taxi driver at gunpoint. When police finally apprehended Todd, he was hiding atop Opryland, partially submerged in a water-cooling vat. The Metro Fire Department was brought in to assist in Todd's removal from the vat, using a bucket and ladder truck.

His bond has reportedly been set at $180,000.

"He rode the Greyhound bus and had a layover, then left in blue lights," Sgt. Blackburn said. "There definitely could be more charges. We hope that there are no more victims."

Ron Paul, will be TIME Magazines person of 2012

Age: 76
Occupation: Republican presidential candidate
The leader of a vibrant libertarian movement, Paul has drawn huge, passionate crowds throughout the Republican presidential campaign. But on his third and final bid for the White House, Paul is again poised to come up short. Even so, the retiring 12-term Congressman has reshaped the national political debate and left behind his imprint on his party — not to mention an heir, Senator Rand Paul, to inherit his army.




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