A federal judge told San Bernardino, Calif., officials to negotiate with an insurer to gain access to money that would have gone to families who have filed lawsuits claiming police brutality, an issue that’s again delayed the exit of the city of 200,000 from bankruptcy, the Wall Street Journal reported today. Bankruptcy Judge Meredith Jury said yesterday that another bankruptcy judge will mediate a dispute between city leaders and insurance administrators over coverage for major lawsuits, including the police litigation. She set a Dec. 6 hearing to determine whether the city can leave bankruptcy protection after more than four years. The city had filed for bankruptcy on Aug. 1, 2012, saying that it suffered from double-digit unemployment and lower tax revenue from fallen property values. City lawyers have proposed a 76-page plan that would pay 1 percent of $209.3 million owed to retirees, families who have won police brutality lawsuits and other unsecured debts. Under that plan, which Judge Jury must approve, a European bank owed $51 million in bond debt would be paid 40 percent of its claim over 30 years, according to documents filed in U.S. Bankruptcy Court in Riverside.
