Stockton, Calif., the biggest U.S. city to file for bankruptcy, will restart negotiations with creditors while it develops a plan to adjust its debts and exit court protection by year’s end, Stockton attorney Marc A. Levinson told a bankruptcy court, Bloomberg News reported today. Lawyers for the city and creditors told a federal judge yesterday that they want to try to negotiate an end to the chapter 9 case after a months-long fight over whether Stockton should be thrown out of bankruptcy. The city’s goal is to file a plan to adjust its debt sometime in the third quarter of this year and, assuming Bankruptcy Judge Christopher M. Klein approves it, exit bankruptcy by year's end. This month creditors, including Assured and Franklin Resources Inc., lost a battle to force the city out of bankruptcy. Judge Klein ruled that the city was eligible to remain in bankruptcy, where it’s protected from creditor lawsuits, while it develops a plan to reduce its debt.
