Stockton Battle With Bondholders Begins This Week
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Stockton, California, which last week became the biggest U.S. city to seek court protection, will begin a historic effort this week to be the first American city to use bankruptcy to successfully impose losses on bondholders.
Lawyers for Stockton are to appear in U.S. bankruptcy court in Sacramento July 6 for the initial hearing in the case. City council members have set aside more than $3 million for the first year of a bankruptcy court fight with bondholders and labor unions over how to divide a smaller budget.