LOS ANGELES — U.S. Bankruptcy Judge Christopher Klein has denied a request by Franklin Templeton Investments to stay Stockton's Chapter 9 bankruptcy exit.
"This is great news," City Manager Kurt Wilson said in a prepared statement after the judge's Jan. 20 action. "As the judge indicated today in court today, it removes a lot of uncertainty for all of us — employees, retirees, creditors, businesses and investors - and allows Stockton to move forward without the stigma of bankruptcy."
Klein ruled on Oct. 30 that the city could exit bankruptcy. The request for a stay prevented the city from implementing its plan of adjustment while the appeal was being heard.
Once the judge signs the order, an automatic stay will be in place for 14 days; after that the city's plan can take effect.
The case still faces the pending appeal before a three-judge U.S. Bankruptcy Appellate Panel of the Ninth Circuit.
Klein said during Tuesday's hearing he is confident in his prior decisions and that he feels that the "likelihood of success of the appeal by Franklin is low," according to the city's press release.
