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Shuttered and padlocked businesses line Main Street in Stockton, Calif.
Shuttered and padlocked businesses line Main Street in Stockton, Calif.
(KEVIN BARTRAM/REUTERS)

Financial Times

Municipal bondholders put state law to the test

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Stockton, California 1; bondholders 0. Calpers TBD. A federal judge this week allowed Stockton’s bankruptcy to proceed, over the protests of creditors. Municipalities have to pass through various hoops to go bankrupt, including proving that they tried negotiating with creditors first.