Stockton, Calif., says that it has begun paying creditors as a final step to exit bankruptcy after more than two-and-a-half years dealing with over $2 billion of debt, Reuters reported today. Stockton, a city of 300,000 east of San Francisco, wrote checks to 1,100 retirees for their health benefits claims and to other general unsecured creditors earlier this week. Once the wire transfers were completed yesterday, the city will be "out of bankruptcy," meaning it had restructured its obligations, attorney Marc Levinson said. Stockton's plan to exit bankruptcy was approved in October with a reduction of debts imposed on creditors, including Franklin Templeton Investments, which took a haircut from its collateral of golf courses and a park.
