City of Stockton will suspend bond payments to avoid bankruptcy

http://www.sacbee.com/2012/02/24/4288696/city-of-stockton-will-suspend.html

Hoping to stave off the ignominy of becoming America's largest city to declare bankruptcy, Stockton officials are planning on suspending $2 million in bond payments and are seeking mediation with the city's creditors.

In a press conference this morning, Stockton City Manager Bob Deis said City Council members will vote Tuesday on "major action" plan to rescue the financially beleaguered city in lieu of filing for bankruptcy protection.

It includes taking advantage of a new California law that allows cities to seek a 60 to 90-day mediation with creditors in hopes of reworking its payment obligations outside of U.S. bankruptcy court.

... Stockton is now saddled with 19 percent unemployment and its depressed housing market is still a year or two away from bottoming out, Deis said.