News Summary: Calif. city readies bankruptcy plan

AP News
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Posted: Jun 06, 2012 4:24 PM

POSSIBLE BANKRUPTCY FILING: A California city that has the second-highest foreclosure rate in the nation is preparing for a possible bankruptcy filing. Stockton would become the nation's largest city ever to file for bankruptcy.

NEGOTIATIONS: Lawmakers are prepping bankruptcy plans in case officials are unable to broker a deal with the city's creditors. City Council members granted the city manager authority to seek Chapter 9 bankruptcy protection in three weeks if there's no agreement.

CONTEXT: Stockton's revenues have declined significantly in recent years while expensive investments the city made failed to produce the desired windfall.