LOS ANGELES — U.S. Bankruptcy Judge Meredith Jury is expected to rule Tuesday on some of the final issues still preventing San Bernardino, Calif. from exiting its four-year-old bankruptcy case.
The judge ordered city officials into mediation with one of the few major creditors still challenging the bankruptcy during a November 15 hearing.
The city has been in bankruptcy since August 2012.
Jury had anticipated ruling during the November hearing on both issues raised by the creditor, the Big Independent Cities Excess Pool, as well as other remaining issues, but postponed the ruling to the Dec. 6 hearing.
The mediation that began Nov. 18 was held before retired U.S. Bankruptcy Judge Gregg Zive, who had also handled the mediation between the city and the California Public Employees' Retirement System, unions and bondholders.
BICEP attorneys said in court documents that they were confident mediation would enable them to resolve matters, but city attorneys Paul Glassman and Fred Neufeld said BICEP should have sought mediation six months ago.
BICEP is a risk-sharing pool of large Southern California cities for claims against any of the member cities, and its disputes with San Bernardino involve whether the city or BICEP is responsible for claims of more than $1 million.
Individual creditors with claims against the city termed the "civil rights creditors" were also included in the mediation with BICEP.
Creditors who have already voted in favor of the bankruptcy plan are: CalPERS; COMMERZBANK Finance & Covered Bond S.A., formerly Erste Europäische Pfandbrief-Und Kommunalkreditbank AG; municipal bond insurer Ambac Assurance Corporation; the unions; and a retiree committee.
COMMERZBANK holds $52 million in pension obligation bonds and Ambac insures those bonds.
The city filed its third amended debt adjustment plan on May 27.
In September, City Attorney Gary Saenz told The Bond Buyer its almost four-year-old bankruptcy case could be over by the end of 2016 with an effective exit date around March.
"It is all contingent on how things go, but that is still our expectation," Saenz said at the time. "Voting has come in overwhelmingly in support of the plan, which helps with regard to confirmation."
CalPERS reached an agreement in substance with the city more than a year ago and the city reached an agreement with pension bondholders in May. U.S. Bank, which holds several million dollars of commercial paper issued against city buildings, also had previously reached an agreement with the city.