CalPERS will appeal a judge’s ruling that found the city of San Bernardino eligible to remain in Chapter 9 bankruptcy.
The $272.7 billion California Public Employees’ Retirement System, Sacramento, said in a statement Thursday it will file its appeal on the grounds that San Bernardino didn’t consider alternatives to its bankruptcy filing, didn’t file for Chapter 9 in good faith and didn’t provide reliable financial information.
U.S. Bankruptcy Judge Meredith Jury in Riverside, Calif., in August overruled the pension fund’s objection and found in the city’s favor, saying the city needs the “breathing space” afforded by bankruptcy to renegotiate debts.
San Bernardino sought bankruptcy protection from creditors on Aug. 1, 2012, blaming a fiscal emergency brought on by a $46 million budget shortfall. Since filing, the city has fought its employee unions in an effort to cancel their contracts and quit making certain payments to CalPERS, the biggest U.S. pension fund.