SAN FRANCISCO – San Bernardino, Calif. filed Wednesday for protection under Chapter 9 of the U.S. bankruptcy code.
The city filed papers in the U.S. Bankruptcy Court Central District of California in Riverside, Calif. that said it had as much as $1 billion of liabilities, $1 billion of assets and between 10,000 and 25,000 creditors.
In a statement shortly after the filing, Interim City Manager Andrea Travis-Miller said she hopes to propose a plan to keep the city solvent while in bankruptcy to council in the next three weeks.
After council adopts the plan, Travis-Miller said the city would develop a plan of adjustment to file in bankruptcy court that would lay out how San Bernardino hopes to restructure its debts.
Last month the Council gave the city attorney the authority to file for Chapter 9 protection because it said it would otherwise be unable to pay its workers.
San Bernardino’s council has since adopted an emergency budget that includes no general fund payments toward its $50 million POBs.
San Bernardino, a city of more than 211,000 located 65 miles from Los Angeles, said it faces a $46 million deficit for fiscal 2013.
According to San Bernardino’s 2010 audited financial report, its most recent, the city had $223 million of outstanding debt at the end of June 2010, of which $131million were tax-allocation bonds.