San Bernardino, Calif., seeks judgment on Chapter 9 eligibility

By Jim Witters

Wilmington, Del., July 8 - The City of San Bernardino, Calif. wants the judge to issue a summary judgment, dismissing challenges to its eligibility to continue its Chapter 9 bankruptcy case, according to a July 5 filing with the U.S. Bankruptcy Court for the Central District of California.

The California Public Employees' Retirement System and the San Bernardino Public Employees Association said in October that the city may not be eligible for bankruptcy protection.

At the time of the challenges, CalPERS sought a deadline for the city to submit its proposed plan of adjustment and sufficient time to review the plan.

The union said in October that the city "has not carried its burden of demonstrating that it is eligible to file for, and remain in, bankruptcy under the protections of Chapter 9."

In its July 5 filing, the city says it has met the legal requirements to be in Chapter 9 bankruptcy.

Specifically, the city states that

• The uncontrovertible facts establish that the city is authorized to be a debtor under Chapter 9;

• The city was insolvent when it initiated the bankruptcy case;

• The city wants to effect a plan of adjustment of its debts;

• Negotiations with all of its creditors was "impracticable," and "the SBPEA and CalPERS have conceded that the city has satisfied (the legal requirements) and waived any objection by failing to file a timely objection to the city's eligibility on this ground"; and

• The city filed its petition in good faith.

A hearing on the city's motion is scheduled for Aug. 28.

San Bernardino filed for bankruptcy on Aug. 1 in the U.S. Bankruptcy Court for the Central District of California. The Chapter 9 case number is 12-28006.

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