If approved, Stockton's Plan for the Adjustment of Debts (plan of adjustment) identifies negotiation strategies, legal ambiguities, and their potential consequences for future municipal bankruptcies in California and elsewhere, according to a Fitch Ratings report.

"Stockton's ability to achieve significant concessions from labor under threat of bankruptcy provides food for thought about incentives in other potential cases," said Amy Laskey, Managing Director. "The specter of bankruptcy may have motivated labor, although not bondholders, to negotiate."

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