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
Crypto Compliance: A Comprehensive Guide
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Author: Bryce S. Robins
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Author: Matthew F. Mimnaugh
SPACs Are Back, What You Need to Know
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
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.