Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Bondholders Confront CalPERS in San Bernardino Bankruptcy Case
Author: Joel R. Glucksman
Date: January 1, 2013
Key Contacts
Back
Creditors who are the city’s bondholders in the San Bernardino, California, bankruptcy case are displeased with the position taken by the California Public Employees’ Retirement System – or CalPERS – and they are taking their concerns to court.
The bondholders filed a legal protest against CalPERS, arguing that the pension fund is seeking preferential treatment in the bankruptcy case. In their 114-page protest, the bondholders said they have the same rights as the pension fund and are prepared to take the fight all the way to the Supreme Court to prevent CalPERS from obtaining permission from the court to sue the city on its pension obligations. They argue that allowing the pension fund to sue San Bernardino could result in tens of millions of dollars in losses for the Wall Street bondholders.
Immediately following San Bernardino’s appeal for Chapter 9 protection under bankruptcy law in August, CalPERS demanded the right to sue the city. San Bernardino fell behind on $6.9 million in pension payments after it filed for bankruptcy.
CalPERS group argues that the pension obligations of member cities must be met no matter what – an argument that encouraged the city of Vallejo to continue making payments following its bankruptcy in 2008, according to the Sacramento Bee. CalPERS said that California state law supports their bid to primacy, and that pension contributions cannot be reduced even in the event of bankruptcy.
Despite these arguments, the city said it plans to resume payments in July 2013, and also asks to restructure its current debt to lower the amount it must pay.
CalPERS is the city’s biggest creditor and San Bernardino’s unfunded pension obligations to the fund amount to $143.3 million, according to Reuters. Wall Street bondholders follow CalPERS as the city’s second biggest creditor, owning roughly $50 million in bonds.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Scarinci Hollenbeck Expands NYC Real Estate and Litigation Practices ADDING four litigators
NYC Real Estate and Litigation Attorney Ryan O. Miller and Team Join Scarinci Hollenbeck, LLC New York City, NY – August 13, 2025 – Scarinci Hollenbeck, LLC has strengthened its Real Estate and Litigation practices with the addition of four New York City-based attorneys. Ryan Miller, who joins as a partner, is well known for […]
Author: Scarinci Hollenbeck, LLC
What is Business Law and Why Is it Important?
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Author: Dan Brecher
Corporate Transactions: Best Practices for Successful Deals
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
Author: Dan Brecher
How to Conduct a Fair and Legal Employee Termination in 2025
Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]
Author: Angela A. Turiano
Admin Dissolution for Annual Report: What You Need to Know
While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]
Author: Dan Brecher
What Is Antitrust Litigation Law?
Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]
Author: Robert E. Levy
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.