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
Commercial Real Estate Trends to Watch in 2026
Commercial real estate trends in 2026 are being shaped by shifting economic conditions, technological innovation, and evolving tenant demands. As the market adjusts to changing interest rates, capital flows, and workplace models, investors, owners, tenants, and developers must understand how these trends are influencing opportunities and risk in the year ahead. Overall Outlook for Commercial […]
Author: Michael J. Willner
One Big Beautiful Bill: New Tip Income Tax Rules Employers & Workers Need to Know
Part 2 – Tips Excluded from Income Certain employees and independent contractors may be eligible to deduct tips from their income for tax years 2025 through 2028 under provisions included in the One Big Beautiful Bill. The deduction is capped at $25,000 per year and begins to phase out at $150,000 of modified adjusted gross […]
Author: Scott H. Novak
One Big Beautiful Bill: New Overtime Tax Rules Employers and Employees Need to Know
Part 1 – Overtime Pay and Income Tax Treatment Overview This Firm Insights post summarizes one provision of the “One Big Beautiful Bill” related to the tax treatment of overtime compensation and related employer wage reporting obligations. Overtime Pay and Employee Tax Treatment The Fair Labor Standards Act (FLSA) generally requires that overtime be paid […]
Author: Scott H. Novak
New York’s FAIR Business Practices Act: What the New Consumer Protection Measure Means for Your Business
In 2025, New York enacted one of the most consequential updates to its consumer protection framework in decades. The Fostering Affordability and Integrity through Reasonable Business Practices Act (FAIR Act) significantly expands the scope and strength of New York’s long-standing consumer protection statute, General Business Law § 349, and alters the compliance landscape for New York […]
Author: Dan Brecher
How to Reduce Legal Risk as Your New Jersey Business Grows in 2026
For many New Jersey businesses, growth is a primary objective for the New Year. However, it is important to recognize that growth involves both opportunity and risk. For example, business expansion often results in complex contracts, an increased workforce, new regulatory requirements, and heightened exposure to disputes. Without proactive planning, even routine growth can lead […]
Author: Ken Hollenbeck
Crypto Investor Protection: SEC and CFTC Enforcement Trends
Crypto investor protection continues to evolve, with the SEC and CFTC investing resources and coordinating more closely to uphold regulatory standards. Whether you’re a retail investor, an institutional trader, or part of a crypto startup, understanding enforcement trends is essential for navigating this dynamic and high-stakes regulatory environment. Crypto Is No Longer the Wild West […]
Author: Dan Brecher
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.