Bankrupt San Bernardino to halt payments to Calpers, bondholders

Yahoo News ^ | November 27, 2012 | Tim Reid and Jim Christie | Reuters

[Uncle Chip]

SAN BERNARDINO, California (Reuters) - Bankrupt San Bernardino, California, voted on Monday to present a plan to a bankruptcy judge that seeks to balance its budget through deferring payments to the state's public employee pension fund and to the city's bondholders.

.......

San Bernardino has already halted its biweekly $1.2 million payment to the California Public Employees' Retirement System (Calpers) since it filed for bankruptcy protection on August 1.

The city calls the halted payments "deferrals," but under the pendency plan it would not resume any payments to Calpers until the 2013-2014 fiscal year. It also wants to negotiate its debt to Calpers so it can be repaid over 30 years.

Calpers, America's biggest pension fund which serves many cities and counties in California, is San Bernardino's biggest creditor. The city lists its unfunded pension obligations to Calpers at $143.3 million. Calpers says if the city halted its relationship with the fund immediately the debt would be $319.5 million.

Calpers has already formally objected to San Bernardino's bankruptcy filing. While it says it wants to negotiate with the city, it has also said it will ultimately take legal action to recoup any unpaid pension payments.

....

San Bernardino's case sets up a showdown between Calpers and other creditors, particularly Wall Street bondholders and insurers, over how they will be treated in the bankruptcy.

Calpers has long argued that pension contributions cannot be touched, even in bankruptcy. Wall Street has signaled that it intends to fight Calpers' historical primacy as a creditor in the San Bernardino case.

Such a fight could have far-reaching implications for Calpers and other creditors in future municipal bankruptcy proceedings.

[yefragetuwrabrumuy]

There must be something in the air today. In several different threads I have posted stuff that is mildly sarcastic, or just plain observational, yet have had people responding like they were spoiling for a fight, and I had written something offensive.

No, I am not a socialist, nor do I like socialist anything, and it’s pretty discomfiting for others to even suggest that I am or do.

[longtermmemmory]

This is a different scenario.

Here the bond insiders think they are entitled to 100% secured status regardless of the law.

There are no good guys here. Remember these are the thugs using bonds the way unions use strikes.

[PapaBear3625]

There will be a war over this. Pensioners vs producers.

No, the true war would be between pensioners and the welfare class. The reason SB is bankrupt is it has too many people taking public assistance, and not enough paying taxes.

[listenhillary]

“No, the true war would be between pensioners and the welfare class.”

That would solve the problem if it went far enough.

[RegulatorCountry]

So, tell me this, if the City Of San Bernardino is not making biweekly pension fund payments to CalPers as agreed, then pension coverage for current and future pensioners of the City Of San Bernardino is in jeopardy because it is not being funded, correct?

Or, does everybody pretend that the pension plan continues on as planned with no interruption, despite the City Of San Bernardino failing to fund it?

If there are no consequences for failing to fund, then they’ll continue failing to fund.

Government agencies are so stupid when it comes to money. You’d think it wasn’t theirs or something. /s

[RFEngineer]

“No, I am not a socialist, nor do I like socialist anything, and it’s pretty discomfiting for others to even suggest that I am or do.”

Then quit sounding like a socialist. If you are willingly dependent on government health care and they try to kill you with inadequate socialist medical care to save money on you for Sandra Flukes birth control, who’s fault is it?

[yefragetuwrabrumuy]

I was not sounding like a socialist. I was being sarcastic. And not grasping that even after I explained the joke makes you sound somewhat dense.

[ex91B10]

"Of course, then Obama would probably just get Bernanke to start buying it, instead. :) "

It will happen. The feds will bailout CA.

"Too Dem to Fail".

Impeach the kenyan or secession.

[RFEngineer]

“I was not sounding like a socialist. I was being sarcastic. And not grasping that even after I explained the joke makes you sound somewhat dense.”

You were sounding socialist, and not as out of place as you should have sounded. It used to be that the sarcasm would be obvious, even hilarious around these parts, nowadays socialism in the form of medicare/social security is not laughed at anymore.

Can you make up a knee-slapper about a dead ambassador? Maybe I’ll get my sense of humor back.