CalPERS and Unions Win Again – Taxpayers and Bondholders Lose

By Mike Shedlock
In bankruptcy, the federal courts have ruled that cities can reduce pension obligations. They can, but they don’t have to. In Detroit, bondholders were sacrificed to maintain police and fire pensions with minimal haircuts. On Monday, U.S. Bankruptcy Judge Meredith Jury ruled against bondholders in favor of Calpers in the San Bernardino bankruptcy. She acknowledged...

TAGS: CalPERS, Pension Obligation Bonds, San Bernardino bankruptcy, Stockton bankruptcy

The Fragility of "Can't Fail" Thinking

By Mary Pat Campbell
CalPERS, the large California public pension plan, has filed an amicus brief in the case of Detroit’s bankruptcy. Calpers does not like the Detroit pension plans being treated like unsecured creditors in a bankruptcy proceeding, and cites the constitutional (state constitutional, that is) protections for pensions. Thing is, there’s law, and there’s reality. But let’s...

TAGS: CalPERS, Detroit bankruptcy, San Bernardino bankruptcy

Pension Battle Shifts to San Jose, San Bernardino, Stockton

By Mike Shedlock
Now that a federal judge in Michigan has properly ruled pension obligations are not sacrosanct (see Lesson for Union Dinosaurs) the spotlight is once again on union dinosaurs in California. Bankrupt San Bernardino foolishly did not attempt to shed pension obligations in bankruptcy, but perhaps it can now reconsider. What about Stockton and Vallejo? On April...

TAGS: defined benefit pensions, Public sector pensions, San Bernardino bankruptcy, San Jose pension reform, Stockton bankruptcy, Vallejo bankruptcy

California’s Public Employment Relations Board Thwarts Pension Reform

By Jon Coupal
When it comes to state government, most people think of the governor and the members of the Legislature, those who are elected by the voters and do their business under the Capitol dome. However, there is an entire class of faceless, unelected appointees to the state’s hundreds of boards and commission who determine whether or...

TAGS: pension reform, San Bernardino bankruptcy, Stockton bankruptcy, Vallejo bankruptcy

The Bankruptcy Tsunami

By Steven Greenhut
First Vallejo, then Stockton, then Mammoth Lakes and now San Bernardino.  As Orange County Supervisor John Moorlach told Bloomberg News, the bankruptcy dominoes are starting to fall. One California city after another — following a decade-long spree of ramping up public-employee pay and pension benefits, as well as redevelopment debt — are becoming insolvent. Not...

TAGS: San Bernardino bankruptcy, Stockton bankruptcy, Vallejo bankruptcy