Key Test Looms for Stockton, California, Bankruptcy Bid

The city of Stockton, California, has a strong case heading into court next week in a bid to establish eligibility for bankruptcy protection, a move contested by bond insurers of more than $350 million of its debt, lawyers watching the case predicted. At the February 26 hearing in Sacramento, Chief Bankruptcy Judge Christopher Klein is likely to schedule a fight in court over eligibility – a battle that bankruptcy law experts predict the city of 300,000, the largest in the United States to have ever filed for municipal bankruptcy, will win.