San Bernardino Bankruptcy-CalPERS Denied 9th Circuit Appeal

On November 15, 2013, Hon. Judge Meredith Jury denied CalPERS’ request to challenge San Bernardino’s eligibility for bankruptcy protection at the 9th Circuit Court of Appeals level.  The judge held that such an appeal would be “duplicative” and essentially a waste of judicial resources.

It has already been adjudged that San Bernardino is eligible to enter bankruptcy, but CalPERS continues its fight to preserve members’ benefits.  In contrast to Stockton’s bankruptcy, it does not appear that San Bernardino’s plan accounts for payment in full to CalPERS through its Chapter 9 bankruptcy plan.  Of course, it is too early to tell whether the city will actually reduce its payments to CalPERS, which  in turn would have to reduce benefits to public employees eligible for public pensions.  The city does have a tentative bankruptcy plan, yet it has remained confidential thus far.

CalPERS will now take its challenge to the United States District Court in a battle to keep San Bernardino liable for the $25 million in annual payments, moving forward, as well as the $14 million the city owes to CalPERS in arrears.