This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/world-us-canada-21997802
The article has changed 3 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Stockton becomes most populous bankrupt US city | Stockton becomes most populous bankrupt US city |
| (about 4 hours later) | |
| A judge has approved the California city of Stockton's bankruptcy filing, making it the most populous US city ever to enter bankruptcy protection. | A judge has approved the California city of Stockton's bankruptcy filing, making it the most populous US city ever to enter bankruptcy protection. |
| A federal judge said without bankruptcy protection, Stockton would be unable to provide basic government services. | A federal judge said without bankruptcy protection, Stockton would be unable to provide basic government services. |
| The city of 290,000, 90 miles (144km) east of San Francisco, saw its tax base plummet in the US housing market crash. | The city of 290,000, 90 miles (144km) east of San Francisco, saw its tax base plummet in the US housing market crash. |
| The ruling grants Stockton protection from creditors - who opposed the filing - while it negotiates debt repayment. | The ruling grants Stockton protection from creditors - who opposed the filing - while it negotiates debt repayment. |
| Stockton's creditors - bond holders and insurers who had financed the city's debt - argued the city had not cut spending enough nor sought a tax increase to avoid bankruptcy. With the city now in bankruptcy, they may not be repaid their full principals. | |
| But lawyers for the city said it had slashed its budget to the bone after a 70% decline in the city's tax base. | But lawyers for the city said it had slashed its budget to the bone after a 70% decline in the city's tax base. |
| The California city first filed for bankruptcy in June 2012 after failing to come to an agreement with its creditors. The judge came to his decision on Monday after a three-day trial. | The California city first filed for bankruptcy in June 2012 after failing to come to an agreement with its creditors. The judge came to his decision on Monday after a three-day trial. |
| "It's unfortunate that we have been forced to spend millions of dollars, thousands of hours and almost a year on this effort," city manager Bob Deis said, referring to the fight with creditors who opposed the bankruptcy filing. | "It's unfortunate that we have been forced to spend millions of dollars, thousands of hours and almost a year on this effort," city manager Bob Deis said, referring to the fight with creditors who opposed the bankruptcy filing. |
| "These are valuable resources and money that could have gone toward addressing the critical safety needs of our community, restoring services, and paying our creditors." | "These are valuable resources and money that could have gone toward addressing the critical safety needs of our community, restoring services, and paying our creditors." |
| During the housing boom, the city developed its waterfront, with a new marina and sports complex, and negotiated generous pension and healthcare benefits for city employees. | During the housing boom, the city developed its waterfront, with a new marina and sports complex, and negotiated generous pension and healthcare benefits for city employees. |
| But when the housing market crashed beginning in 2008, the city's revenue sank when a rush of home foreclosures caused a dip in property taxes and developer fees. | But when the housing market crashed beginning in 2008, the city's revenue sank when a rush of home foreclosures caused a dip in property taxes and developer fees. |
| Officials were forced to make dramatic spending cuts to patch a budget deficit - roughly $26m (£17m) this year. The city eliminated a quarter of its police officers, one third of the fire department staff and 40% of all other employees. It also cut wages and medical benefits. | Officials were forced to make dramatic spending cuts to patch a budget deficit - roughly $26m (£17m) this year. The city eliminated a quarter of its police officers, one third of the fire department staff and 40% of all other employees. It also cut wages and medical benefits. |
| Stockton's unemployment and violent crime rates now rank among the worst in the nation. | Stockton's unemployment and violent crime rates now rank among the worst in the nation. |
| The city's case was being watched closely by other struggling US cities and towns that may also seek bankruptcy protection. | The city's case was being watched closely by other struggling US cities and towns that may also seek bankruptcy protection. |
| Stockton's largest debt is $900m owed to the California Public Employees' Retirement System to cover pension promises. The city has kept up with pension payments at the expense of other debt, arguing it needs a strong pension plan to retain its workforce. | Stockton's largest debt is $900m owed to the California Public Employees' Retirement System to cover pension promises. The city has kept up with pension payments at the expense of other debt, arguing it needs a strong pension plan to retain its workforce. |