SACRAMENTO - A U.S. federal court ruled late Friday that Vallejo, Calif., is bankrupt, ending a battle over its solvency and forcing the city and its creditors to begin negotiating a plan to adjust the city's debts.

Vallejo, a city of 117,000 about 30 miles northeast of San Francisco, filed for protection from creditors under Chapter 9 of the federal bankruptcy code on May 23, becoming the biggest municipal bankruptcy since Orange County, Calif., in 1994. The city began the current fiscal year with no reserves and a projected $17 million deficit.

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