San Bernardino Bankruptcy to Get Nevada Judge as Mediator

The judge in San Bernardino, California’s bankruptcy said she will appoint a judge who oversaw a $6.5 billion casino reorganization to mediate talks between the city and its creditors.

U.S. Bankruptcy Judge Meredith Jury said she will issue an order next month explaining what issues the mediator, Gregg Zive, will help tackle. Zive, who is based in Reno, Nevada, presided over the case of Station Casinos Inc., which cut debt, reorganized and left bankruptcy in 2011.

Jury asked the city and creditors, which include investors that hold more than $50 million in pension-obligation bonds and the California Public Employees’ Retirement System, to submit matters they want Zive to address, including a plan to cut debt and a dispute with the state over tax collections. Jury will take their views into consideration when she issues her order.

“He seems to be a very good choice,” Jury said after attorneys for the city and some creditors told her they agreed on the selection of Zive, a judge in the U.S. Bankruptcy Court in Nevada.

Since filing for bankruptcy last year, San Bernardino has fought to cancel city employee union contracts and to quit making some payments to Calpers, the biggest U.S. pension fund.

The city, about 60 miles (97 kilometers) east of Los Angeles, has an unfunded pension liability of about $143 million and is in default on $50.4 million in bonds issued in 2005 to help cover pension obligations, according to court documents and the city budget.

The case is In re San Bernardino, 12-28006, U.S. Bankruptcy Court, Central District of California (Riverside).

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