A federal judge ruled Monday that Stockton is eligible for
bankruptcy protection, over the objection of creditors who argued the city
could come up with more money, the LA Times reports.
U.S. Bankruptcy Judge Christopher Klein said Stockton can
move forward with a plan to reorganize debt. He twice stated that the creditors
had acted in bad faith and had refused to pay their share of the costs for
negotiations.
"The creditors got a big black eye today," said
Karol Denniston, an attorney who helped draft the legislation that guided
Stockton's mandated mediation before filing for bankruptcy protection.
"Now the stage is set for the real dogfight...."
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