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San Bernardino eligible for bankruptcy. CalPERS has hissy fit

hissy-fit

Federal bankruptcy laws trump California state law requiring municipalities to pay public pension obligations, ruled a federal judge. California public pension giant CalPERS tried to block the bankruptcy as it means they are no longer first in line for repayment. San Bernardino stopped paying CalPERS when it filed bankruptcy. This is a major big deal and paves the way for other municipalities to do the same.

CalPERS has accused the city of filing for bankruptcy as a delay tactic, failing to provide reliable financial information and having no clear picture for how it will repay its creditors.

In reply, Paul Glassman, the city’s bankruptcy attorney, read aloud a note from City Attorney Jim Penman that called bankruptcy “an extremely painful process” for the city.

“It is an emergency room, not a health spa,” Glassman said, reading the note. “To suggest that any city would subject itself to the process unless it had to is simply disingenuous.”

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