SACRAMENTO - The U.S. Ninth Circuit Bankruptcy Appellate Panel wants to take a closer look at a lower court decision to accept testimony by a city accountant who helped convince the lower court that Vallejo, Calif., is bankrupt.

Judge Michael McManus, chief judge of the U.S. Bankruptcy Court for the Eastern District of California, ruled in September that Vallejo was eligible for protection from creditors under Chapter 9 of the bankruptcy code. The city said it would have been unable to pay its debts and payroll as they came due at the beginning of the current fiscal year and projected a $17 million deficit in its $95 million general fund for the full year.

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