The judge presiding over the Stockton, Calif., bankruptcy case said yesterday that he will wait until late October to make a final ruling over whether the city can exit bankruptcy, Reuters reported today. Bankruptcy Judge Christopher Klein said that he was "not in a position to make a decision right now." Earlier in the day, Judge Klein surprised the courtroom by ruling that the city's contract with the California Public Employees' Retirement System, the world's largest pension fund, could be rejected. That ruling follows a similar determination in the city of Detroit's bankruptcy case, in which that judge decided that pensions could also be made to absorb losses along with other creditors. In that case, the city's pension plans have agreed to accept benefit reductions, but the Detroit bankruptcy is not yet resolved. CalPERS disagreed with the judge's decision. "This ruling is not legally binding on any of the parties in the Stockton case or as precedent in any other bankruptcy proceeding and is unnecessary to the decision on confirmation of the City of Stockton's plan of adjustment," CalPERS spokeswoman Rosanna Westmoreland said.
