Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
CalPERS to Appeal San Bernardino's Bankruptcy Eligibility
Author: Joel R. Glucksman
Date: October 31, 2013
Key Contacts
Back
The California Public Employees’ Retirement System (“CalPERS”) announced its plans to appeal a decision handed down by the U.S. Bankruptcy Court, which affirmed San Bernardino’s eligibility to seek Chapter 9 municipal bankruptcy.
CalPERS, California’s largest pension fund, argues that the city did not seek out other alternatives to alleviate its financial struggles before seeking relief under bankruptcy law. The group also claims that the city failed to file its bankruptcy petition in good faith and did not provide accurate financial information.
“The California voters placed provisions in our Constitution to ensure the employees’ pensions would be protected by CalPERS as their fiduciary and trustee,” said Anne Stausboll, CalPERS CEO. “This appeal affirms our commitment to support and defend the integrity of the system and our members’ vested rights, in accordance with the laws of the land and our obligations under the federal and State constitutions.”
At present, more than 1,700 retirees formerly employed by the city of San Bernardino currently receive a pension from CalPERS, and the municipality currently owes roughly $17 million in overdue payments to the fund.
It is unclear whether the appeal will be successful, as the pension fund tried to block the city’s bankruptcy eligibility in August with no success. U.S. Bankruptcy Judge Meredith Jury, who overruled the fund’s initial objections, said the city needed “breathing space” under bankruptcy protection to renegotiate its debts, according to Bloomberg. She also said in her ruling that all of the city’s 10,000 creditors would be best served through bankruptcy proceedings. However, CalPERS has historically argued that pension funds should not be treated like other creditors.
At roughly $260 billion, CalPERS is the biggest pension fund in the country and is San Bernardino’s largest creditor.
San Bernardino sought Chapter 9 bankruptcy protection last summer, citing severe budgetary shortfalls and pension obligations that resulted in more than $1 billion in debt.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, 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
A Whistleblower Just Filed a Complaint Against Your Company: Here's What to Do Now
Few situations create more uncertainty than learning that an employee has filed a whistleblower complaint. Questions arise immediately: Is the allegation legitimate? Should the employee be placed on leave? Do we need to notify our insurance carrier? Are we now prevented from disciplining the employee if there are unrelated ongoing work related issues? There is […]
Author: Sean M. Pena
Assignment for the Benefit of Creditors: An Alternative to Bankruptcy for Distressed Businesses
When a business reaches the point where it can no longer service its debts or otherwise resolve its liabilities, management is often faced with a difficult question: is a bankruptcy filing necessary or is there another way to perform an orderly liquidation or sale of the business assets? While Chapters 7 and 11 of the […]
Author: John D. Giampolo
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Author: George McGowan
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
Author: Marc J. Comer
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
Author: George McGowan
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
Author: Sean M. Pena
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.