SACRAMENTO - The U.S. Ninth Circuit Bankruptcy Appellate Panel late last week heard Vallejo, Calif., employees' appeal of the city's bankruptcy eligibility.

District Bankruptcy Judge Michael McManus in September found that the city had met the definition of insolvency under Chapter 9 of the U.S. bankruptcy code. He accepted the city's claim that it would have been unable to meet its payroll near the beginning of the current fiscal year and would face a $17 million deficit in its $95 million general fund in the current fiscal year.

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