Stockton bankruptcy will make history; residents reeling
By Diana Marcum
The Los Angeles Times
June 27, 2012
Officials said Tuesday that Stockton would become the nation's largest city to seek protection under the U.S. bankruptcy code.
The city stopped making bond payments, and City Manager Bob Deis said he expected to file bankruptcy papers immediately.
Stockton has been in negotiations with its creditors since late March under AB 506, a new California law requiring mediation before a municipality can file for reorganization of debt. It was the first use of the law, and policy analysts who watched its torturous and tedious progress have titled their report on it "Death by a Thousand Meetings." Mediations ended Monday at midnight.
Recent council meetings have been contentious. Tuesday night's meeting was quieter, with an evident sadness on faces in the packed audience. Many residents said they were there mostly to hear for themselves that the day so long expected had finally come.
"It's a seminal moment in this city's history and I needed to be here," said Dwight Williams, who runs a nonprofit housing organization. "I can't just read about this in tomorrow's paper. I need to hear for myself if there is some inkling as to where we go from here."