Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Analysis Suggests Stockton Bankruptcy More Successful Than San Bernardino
Author: Joel R. Glucksman
Date: July 4, 2013
Key Contacts
Back
Municipal bankruptcies can entail a lengthy and costly process that not only impacts lawmakers, but filters down to affect the debtor’s residents as well.
Over the course of the year, Stockton and San Bernardino, California, made headlines as a result of their high-profile municipal bankruptcies, and a new analysis of these proceedings highlights the differing paths these cities took and the reasons one may exit bankruptcy law protection more successfully than the other.
Currently, the Stockton bankruptcy may be in a position to traverse complex proceedings with more ease than San Bernardino due to the preemptive measures it took prior to filing for bankruptcy protection, a California newspaper The Record reports. The city entered into fiscal emergency declarations and community meetings and was able to make decisions quickly through a unified City Council, the newspaper reports.
In contrast, San Bernardino’s lawmakers were largely divided on the course of action to take, forcing it to hemorrhage more money trying to make decisions about its fiscal crisis.
“San Bernardino is in utter chaos,” Stockton city manager Bob Deis told the Record. “They’re digging for dollars to make payroll. It’s not pretty. We’re fairly organized because the majority of our council is on one page.”
Bankruptcy proceedings play out in a highly public and critical environment, and other cities that are on the verge of municipal bankruptcy – most notably Detroit – may be taking lessons from the other large metropolitan debtors that are currently wending their way through budgetary constraints, unions disputes, and funding shortfalls.
At present, Detroit’s emergency manager Kevyn Orr has suggested a debt restructuring plan aimed at helping the city avoid bankruptcy, but it remains unclear whether creditors will agree to the proposal. Under the suggested agreement, creditors would be asked to accept less than 10 cents on the dollar. In addition, Orr also decided that the city will temporarily suspend principal and interest payments on debt issued to bolster the city’s pension funds.
Of greater import, it is unclear at present whether Detroit will emulate Stockton and present a unified front in dealing with its financial troubles, or whether it will resemble the chaos playing out in San Bernardino.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights
- 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
New York NDA Requirements for Businesses
Non-disclosure agreements (NDAs) remain a critical tool for protecting sensitive business information. However, New York NDA requirements have evolved, and businesses must ensure these agreements are carefully drafted to remain enforceable. In a competitive market like New York City, NDAs are commonly used to protect proprietary information, client relationships, and strategic plans. At the same […]
Author: Dan Brecher
New Jersey Will Contest Grounds Explained
How Courts Evaluate Testamentary Capacity and Undue Influence Will contests in New Jersey are difficult to win, given the strong presumption that a properly executed will reflects the testator’s intent. However, challenges based on lack of testamentary capacity and undue influence remain common, particularly where there are concerns about mental capacity or the involvement of […]
Author: Marc J. Comer
Legal Issues Before Bringing on Investors
Bringing on outside investors can provide the capital and strategic support a business needs to grow. However, raising capital also introduces important legal, financial, and operational considerations. Before bringing on investors, businesses should address key legal issues to reduce risk, streamline investor due diligence, and position the company for long-term success. Early preparation signals that […]
Author: Dan Brecher
SECURE 2.0 RMD Planning Strategies
How the Updated Law Shapes Retirement and Estate Planning The SECURE 2.0 Act of 2022 materially reshapes the required minimum distribution (RMD) landscape, extending tax deferral opportunities while accelerating distribution requirements for many beneficiaries. For high-net-worth individuals and families, these changes are not merely technical. They require a reassessment of retirement income strategies, beneficiary planning, […]
Author: Marc J. Comer
Buying Commercial Property in New Jersey: Legal Guide for Small Businesses
Small businesses considering buying commercial property in New Jersey must evaluate a range of legal, financial, and operational factors. While ownership can offer long-term value and control, it also introduces significant risks if not properly structured. This guide outlines key considerations to help New Jersey business owners make informed decisions, minimize legal exposure, and successfully […]
Author: Robert L. Baker, Jr.
The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities
On January 28, 2026, staff of the U.S. Securities and Exchange Commission’s Divisions of Corporation Finance, Investment Management, and Trading and Markets issued a joint statement clarifying how existing federal securities laws apply to tokenized securities. The SEC’s “Statement on Tokenized Securities” does not establish new law, but it does provide greater clarity on the […]
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.