The city of San Bernardino, Calif., which has been stuck in bankruptcy for more than three years, has reached a repayment deal with its fiercest courtroom foe: a European bank owed about $52 million worth of municipal bonds, Dow Jones Daily Bankruptcy Review reported today. San Bernardino lawyers told Judge Meredith Jury that they have reached a tentative settlement with the bondholder but refused to say how much money the 200,000-resident city offered to repay. Under an earlier proposal, the Luxembourg bank that owns the bonds would get $655,000 plus interest. The deal still needs approval from bank officials and San Bernardino city councilors, according to documents filed in U.S. Bankruptcy Court in Riverside, Calif. The potential deal would silence one of the last remaining major critics of the city's turnaround strategy, making it easier for the city to get out of the bankruptcy case it filed in 2012. Bank lawyers have objected to the city's plan, saying that the city should raise taxes instead of forcing steep cuts on debt holders.
