California: City Moves Closer to Bankruptcy Filing After Talks With Labor Unions Collapsed
According to Bloomberg.com:
Vallejo, a city of 135,000 outside of San Francisco, moved closer to bankruptcy after talks with its labor unions collapsed.
Bondholders will likely be asked to sacrifice some of their investment if the city files for bankruptcy protection, an attorney for the municipality said last night.
Vallejo is facing ballooning labor costs and declining tax revenue and is expected to run out of money within weeks. The city council is scheduled to consider a resolution tomorrow to file for Chapter 9 bankruptcy protection, after negotiations with labor unions to win salary concessions broke down Monday. The city has $59 million in debt outstanding...click to continue
