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San Bernardino and its bankruptcy problem continued

According to Thompson Reuters News and Insight in a June 6, 2013 article the city of San Bernardino and its creditors had a court date scheduled today. Calpers, its biggest creditor, was at this hearing and it argued that the city should provide more information pertaining to its financials. However, the judge did not agree with Calpers that the city should provide more financial information, which is one of the main reasons why the case was prolonged for the past couple of months. There are a few court dates scheduled for the upcoming months and hopefully by then the creditors and the city will come to some sort of agreement on the issues at hand. Also, by the last scheduled court date the court will determine whether San Bernardino is entitled to “Chapter 9 bankruptcy protection” or not.

Two they types of bankruptcies that can be filed are a Chapter 11 claim or a Chapter 9 claim.  Only municipalities can file a Chapter 9 bankruptcy claim and the municipality’s assets are not liquidated meaning that it is not sold so that the creditors can be repaid from the money obtained from the sale of the assets.  Moreover, under Chapter 9, the municipality is usually given some type of protection or safeguard against its creditors. A Chapter 11 claim is available to individuals and entities and a trustee is appointed who is responsible the sale of the debtor’s assets. The proceeds from the sale of the assets then go to the creditors.

If you are facing financial hardships, then bankruptcy may be an option for you. Mr. Lutzky of Jayson Lutzky, P.C. is a Bronx, New York attorney. At your free, in person consultation, he can help determine if bankruptcy is right for you. Over the past 30 years, Mr. Lutzky has represented thousands of satisfied clients. Call us today at 718-329-9500 or visit us online at www.MyNewYorkCityLawyer.com.

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