San Bernardino, Calif., should be allowed to stay in bankruptcy, bond insurer Ambac Assurance Co. and a bondholder owed $50 million said in court papers opposing other creditors’ efforts to strip the city of federal court protection, Bloomberg News reported yesterday. Ambac and Erste Europaische Pfandbrief-und Kommunalkreditbank AG joined San Bernardino in asking a federal judge to overrule objections of the California Public Employees’ Retirement System (CalPERS)and the San Bernardino Public Employees’ Association. The objectors have challenged the legality of San Bernardino’s 2012 chapter 9 bankruptcy filing. While in bankruptcy, CalPERS and other creditors cannot sue the city for failing to pay them. U.S. Bankruptcy Judge Meredith Jury has scheduled a hearing for next month in Riverside, Calif., to decide whether San Bernardino can remain in bankruptcy.
