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San Bernardino Will Create Bankruptcy Plan with the Help of its Residents

Monday, September, 9, 2013


The San Bernardino bankruptcy that is in the U.S. Bankruptcy Court will now be guided by a mediator whose purpose is to streamline the process and guide the city through a predetermined plan to successfully restructure its debt under the bankruptcy code.  According to city officials, an “outline” of the plan will be ready to submit to the judge, Meredith Jury, by October 15th.  


This is a second estimate; the city originally proposed a timeline that, according to the judge, was unreasonably slow.  In a statement given last Wednesday, Judge Jury said, “The primary purpose (of Wednesday’s hearing) was because the answers that I was getting from the city about when it might have some kind of draft, terms sheet ... were not satisfactory to the court. I was hoping to move quicker.”


Paul Glassman, the attorney representing the city, stated, “The council is fully supportive of whatever date the court sets. The city got the message, so they’re fully on board.” October 15th is also the point at which retired bankruptcy Judge Gregg Zive will step in as mediator between the city and its creditors.  The plan due is also to be used as a springboard for those mediation hearings. 


The October 15th deadline also gives San Bernardino residents an opportunity to express their own opinions to the City Council in publically held meetings.  James F. Penman, City Attorney, stated “This is not something the mayor and council and city attorney can do on our own, but something that takes input from the city.”


The input from residents will be considered in determining the different classes of creditors and how they would be repaid in the bankruptcy restructuring while preserving the city’s essential services.  These classes include retirees, bondholders, labor groups and trade creditors.