San Diego Housing Market News and Analysis
Bond holders vs. Calpers - who gets priority when CA cities go BK
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Submitted by ctr70 on December 9, 2012 - 11:40am
Good Economist article about how it could go to federal court over who gets priority for payment when CA cities go into BK. Bondholders want Calpers to get treated like any other unsecured creditor.
Bondholders are challenging Stocktons eligibility for BK b/c it makes no effort to tackle the bloated pension pay outs.
A ruling against Calpers claims to seniority in BK may make BK look more attractive to more cities. Ruling in favor of Calpers could lead to credit downgrades for CA city MUNI debt, the could hurt their ability to borrow.
Will be interesting to see how this plays out.
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