Posted on 04/11/2013 10:19:12 PM PDT by Steelfish
Bankrupt California City to Resume Paying Pension Fund, but Not Bondholders
April 12, 2013 LOS ANGELES (Reuters) - Bankrupt San Bernardino will resume paying into the state pension fund on July 1, but the California city will continue to renege on other debts including payments to bondholders, according to a new budget released late Thursday.
Nearly a year after it halted contributions to America's biggest pension fund, San Bernardino will resume payments to Calpers at the start of the new fiscal year - but continue to not pay other creditors, according to the budget.
San Bernardino will not make interest and principal payments on $50 million in pension bonds issued in 2005, according to the new budget. The city council on Monday will review the budget, a blueprint for how the city proposes to manage its finances since declaring bankruptcy last August.
San Bernardino's decision to resume its $1.2 million, bimonthly employer contributions to Calpers while continuing to defer pension bond debt will intensify the battle between the pension fund and Wall Street bondholders.
(Excerpt) Read more at nytimes.com ...
Well, of course....these jerk-offs don’t want to lose any of their retirement even though they mismanaged the city into the ground an are screwing their local creditors out of their retirement funds.
If court rules in favor of pensioners over bondholder, municipal bond market will take a hit. Every city, county, state that is having budgetary problems will face less bond buyers for their bonds or must pay pay higher interest payments to induce buyers. Pensions will just buy some time before it falls or failing states, cities and etc convinces Congress to bail them out like the banks. Prepare for the fiscal battle of the century as Dems will try bailout using the persuasive argument that the Fed gov bailed out the bankers on Wall Street and why not the pension of gov workers.
so tired of being one of the ignored people in America...
so tired of being one of the ignored people in America...
Reverse of what it should be!!
Kill the unions and their pensions!
Reverse of what it should be!!
Kill the unions and their pensions!
Good luck ever borrowing money again, EVER, San Bernadino!
Probably just screwed other cities as well.
But dont worry the unions will bail you out. /s
Gubmint unions are draining this country dry.
The death knell of municipal bonds.
What idiot would buy them now?
beans, bullets, and pullets...perhaps a bit of silver as well....
The destruction that the unions have caused to this once great country is totally unreal. All my life I’ve never been able to figure out why unions were allowed to run their scam in America. Paying some lazy, lardass knuckledragger for the right to get up and go to work in the morning was always a weird concept to me.
I hope these Federal bankruptcy judges know how important their decisions are for the broader economy.
If the precedent is that non GO muni bond holders take a back seat like GM bondholders...game over. Shut out of the bond market.
Same as the GM bondholders who, by law, were first in line to be paid. Instead the unions won out. This is all an attempt to buy votes!!! If the “Big One” came and California slid into the Pacific, it wouldn’t be a huge loss!!! It’s a lost cause!
The right of public unions is not a constitutional right. FDR was opposed to the idea. It was Jerry Brown who gave us public unions when he was first governor. Thus began the decline of California.
LMBO!!
Obviously, the connected, political scum’s interest comes first. Screw the regular citizen investors and their stinking IRAs.
But it’s what the CA voters want. Must be. They continue to put the same corrupt people in positions of power. Too bad, so sad.
Lessons learned: Never trust a California Democrat to run anything, especially if your money is involved.
Hey San Bernadino. You lost the City of Rialto case too. A tear!
It’s physics. The path of least resistance, you see. Very simple.
This is just the yentas and realtors/medical equipment/part time city council people deciding this in a basement. Meaningless.
Tell it to a judge.
More voters in California are takers than producers, land of gays and trasngenders, huge abortion base, headquarters for EMILY’s LIST, and Planned Parenthood, illegals, largest teacher’s unions, SEIU, prison unions. private unions (grocery and machinist unions and teamsters); postal unions, American Federation of State and County Employees, environmental extremists, trial lawyers, public college and university elites, and every assortment of minority voters that make for the majority, Hollywood liberal newspapers and local left-wing TV outlets.
No surprise.
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