Stockton, California, won court approval of its plan to exit bankruptcy by paying bond investors pennies on the dollar while fully protecting public-worker pensions, in a case that has been watched by other cities in the state facing heavy retiree costs.

"This plan, I'm persuaded, is the best that could be done in terms of restructuring the city's debts," U.S. Bankruptcy Judge Christopher Klein said at a hearing today in Sacramento, the state capital.

Stockton's bankruptcy pitted public-pension advocates against investors, who stood to recover a fraction of what they're owed for their bonds. Bankruptcy lawyers and pension advocates nationwide followed the case to see whether pensions administered by the California Public Employees' Retirement System (Calpers) would be shielded from cuts.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.