Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
June 29--STOCKTON -- The city can expect a fight in bankruptcy court from a Wall Street firm that said today Stockton's leaders failed to muster the courage needed to settle its finances responsibly.
New York-based Assured Guaranty insures $161 million in Stockton bonds the city has stopped paying, including the debt on the eight-story downtown building bought under unrealized plans to one-day house a new City Hall.
The City Council chose to unfairly skimp on its investors, Assured said in a prepared statement, rather than liquidate property, cease non-essential services, raise taxes and force further concessions from its employees and retirees.
"Many other cities across the country are experiencing similar financial challenges, but they ... have responsibly chosen to make the difficult decisions rather than choosing bankruptcy," Assured said.
Assured was among creditors that met with Stockton officials for three months in confidential mediation that ended Monday. On Tuesday, the City Council voted to send Stockton into bankruptcy, which was filed Thursday.
Bankruptcy caps three years of chronic debt. City leaders blamed poor management dating to the 1990s and the more recent economic recession. Stockton is "unfairly discriminating" against Assured, said the firm, which intends to "vigorously" enforce its rights in court.
Read Saturday's Record for more on this story by staff writer Scott Smith.
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