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As Stockton home prices tanked it still maintained some of the most generous public employee benefits in California. Creditors fought the city bankruptcy filing in court, saying it wasn't fair that they were taking haircuts but CalPERS was not. Stockton argued that under California law, CalPERS isn't a creditor and had to be paid.
A judge declared that at the moment Chapter 9 is allowable and necessary for the city to continue to provide basic services.
Michael Sweet was interviewed during this news segment and noted that the judge said "the day of reckoning will come later on in this case." The judge also made it clear that the CalPERS issue will have to be addressed in order for the city to be clear. Sweet believes Stockton is suffering what many other cities are suffering across the country.
Click here to watch the entire segment.
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