Judge appoints a mediator for an August mediation in the Stockton Bankruptcy Case
U.S. Bankruptcy Judge Christopher Klein plans for the city of Stockton and its creditors to meet with U.S. Bankruptcy Judge Elizabeth L. Perris on August 30th. At the August conference the structure of the mediation will be decided.
In court last week, Judge Klein said that a successful bankruptcy requires the California city to propose “a consensual plan of adjustment.” This plan will require the city and its creditors to agree. Agreement is something that months of mediation has failed to create.
On June 28th, Stockton filed for bankruptcy, after bondholders, labor unions and the city failed to reach a consensus. On July 10th, a group of retired employees filed a lawsuit in order to prevent the city from ending their health care benefits. Prior to entering bankruptcy, Stockton said it would end retiree benefits to balance its budget.