The biggest U.S. pension fund argued in a court filing that its status as a state agency gave it sweeping powers in the San Bernardino, Calif., bankruptcy case and that the federal jurisdiction that applies in bankruptcy should be overridden by the state's rights, Reuters reported yesterday. The California Public Employees' Retirement System latest legal argument, filed late on Monday, contends that bond insurers who are opposing CalPERS in San Bernardino are actually supporting its legal position in another big municipal bankruptcy in Alabama. San Bernardino, a city of 210,000 about 60 miles east of Los Angeles, filed for bankruptcy protection on Aug. 1. Since then, it has halted its bi-weekly, $1.2 million payment to CalPERS, saying that it wants to defer any payments to the fund until fiscal year 2013-2014.
