Stockton Discloses Mediation Discussions

July 23, 2012

Officials of Stockton, CA, on the verge of going through with the biggest bankruptcy of any U.S. city in history, have revealed some of the negotiations conducted in so-far unsuccessful mediation talks with creditors. Under a proposal made public July 20, Stockton told unsecured bondholders owed about $124.3 million they would no longer receive any debt payments from the city’s “general fund,” used to pay for services like police and fire protection, and asked secured bondholders to accept smaller interest payments and a longer, 40-year repayment term.

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