Stockton Bankruptcy Fight Begins in Court Today

Lawyers for Stockton, California’s bondholders, who face a fight with the bankrupt city over proposed cuts, will arrive in court today armed with fewer weapons than investors owed money by reorganizing companies.

Stockton is trying to become the first American city to use bankruptcy to impose losses on bondholders. Bondholders will be limited to two main options if they are to block Stockton in court, said Lee Bogdanoff, a bankruptcy attorney: get the case thrown out or defeat the city’s reorganization proposal.

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