SAN FRANCISCO (Reuters) – Stockton, California said on Friday it had struck tentative deals opening the door to settlements with two major creditors, and putting the city at the “beginning of the end” of its bankruptcy case.
The deals also could avert a major court fight promised by the creditors, bond insurers that led opposition to Stockton's bankruptcy and who had threatened to drag the state pension fund Calpers into their fight with the city.
In a draft of its plan for exiting bankruptcy, Stockton said it had the “outlines of a negotiated settlement” with bond insurer Assured Guaranty over $124.3 million in outstanding pension obligation bonds the city had targeted for losses.
The draft plan also disclosed a preliminary deal with bond insurer National Public Finance Guarantee over $45.1 million in outstanding lease revenue bonds for the city's arena that had been in dispute.
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