Bankruptcy Judge Meredith Jury ruled yesterday that pension bondholders can’t force the bankrupt California city of San Bernardino to pay them as much as the state’s powerful retirement system, a judge ruled, Bloomberg News reported yesterday. Judge Jury acknowledged that her decision yesterday is likely to be seen as unfair to the municipal-bond market and may even discourage investors from buying pension-obligation bonds in the future. “What I see as unfair and might seem unfair to the outside world does not matter under law,” Jury said. She said there was no legal way to force bondholder debt to be repaid exactly as monthly pension dues owed to the California Public Employees’ Retirement System (CalPERS). In January, bondholders sued San Bernardino in federal court, seeking to convince Judge Jury that their debt must be given equal repayment status as the city’s payments to CalPERS. San Bernardino filed bankruptcy in 2012, blaming the high cost of fire and police contracts, including pensions. Since then, the city has battled fire and police unions over its plan to impose cuts.
