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
When a Child Turns 18: The Gap in Your Family’s Estate Plan
Once a child turns 18, parents lose the automatic legal authority to make medical and financial decisions on their behalf, even if the child still lives at home or remains on the family’s insurance. Three documents close that gap: a durable power of attorney, a health care proxy or directive, and a HIPAA authorization. For […]
Author: George McGowan
Business Mediation: An Overview and Practical Tips
Business mediation is a confidential, voluntary process in which a neutral third party helps companies negotiate a resolution to a commercial dispute without going to trial. Because working with a mediator is very different from litigating in the courtroom, it is important to understand how commercial mediation works, when it makes sense for your dispute, […]
Author: Paul Grossman
Top 5 Causes Leading to Construction Defect Litigation
The five most common causes of construction defect litigation are design defects, substandard materials, workmanship defects, code violations, and subsurface defects. Because these flaws can compromise a building’s integrity, functionality, or safety, they frequently lead to disputes involving multiple parties and high financial stakes. Key takeaways: What is Construction Defect Litigation? Construction litigation is complex, […]
Author: Paul Grossman
How to Protect Your New Jersey Business When Going through a Divorce
The most effective ways to protect your business in a divorce are put in place before one begins: a prenuptial or postnuptial agreement, clean separation of business and personal finances, and divorce contingencies built into your operating or buy-sell agreements. If divorce is already underway, the priorities shift to establishing how the business is classified […]
Author: Jay McDaniel
10 Common Issues in Franchise Disputes
The most common franchise disputes involve breach of contract, franchise termination and non-renewal, intellectual property rights, territorial encroachment, royalty and fee payments, franchisor support obligations, and violations of state franchise laws such as the New Jersey Franchise Practices Act. Franchisors and franchisees can often resolve these conflicts by providing written notice detailing the dispute and […]
Author: Paul Grossman
Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together
New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]
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.