{"id":616,"date":"2012-07-17T06:20:10","date_gmt":"2012-07-17T06:20:10","guid":{"rendered":"http:\/\/www.westcoastbk.com\/blog\/?p=616"},"modified":"2012-09-12T06:12:37","modified_gmt":"2012-09-12T06:12:37","slug":"the-first-fight-stockton-california-bankruptcy-case-12-32118","status":"publish","type":"post","link":"https:\/\/www.westcoastbk.com\/blog\/2012\/07\/the-first-fight-stockton-california-bankruptcy-case-12-32118\/","title":{"rendered":"The First Fight: Stockton California Bankruptcy Case 12-32118"},"content":{"rendered":"

By Ryan C. Wood<\/a><\/p>\n

On June 29, 2012, the City of Stockton filed a motion to disclose information about the failed neutral evaluation process (NEV).\u00a0 The NEV was required to take place under California Law, California Government Code 53760.\u00a0 The NEV process began on March 27, 2012, and ended approximately 90 days later after an extension of time to try and continue negotiations to avoid bankruptcy.\u00a0 The NEV process concluded on June 25, 2012.\u00a0 Code section 53760 allows for disclosure of NEV information under certain circumstances.\u00a0 If it is determined that the confidential information disclosed during the NEV process is necessary to prove a municipality is eligible to be a debtor under Chapter 9 of the Bankruptcy<\/a> Code.\u00a0 This is the reason the City of Stockton sought permission from the Bankruptcy Court to release confidential information.\u00a0 Stockton wanted to provide the Bankruptcy Court with a 790 page document that details their financial circumstances, the length of the negotiations and the participants.\u00a0 Stockton needs to prove it filed its bankruptcy petition in good faith pursuant to Bankruptcy Code section 921(c).<\/p>\n

A number of parties that participated in the NEV process opposed Stockton\u2019s request including Wells Fargo National Association.\u00a0 Their limited objection argued that Stockton\u2019s request only sought permission for Stockton to release information about the NEV process and did not ask for permission for all parties that participated in the NEV process to disclose their information.\u00a0 If only Stockton could disclose this information then it would look one sided.\u00a0 The concern was that Stockton would merely pick and choose the information to disclose and not show the whole picture of the failed negotiations.<\/p>\n

A hearing was held regarding Stockton\u2019s request on July 6, 2012.\u00a0 The Bankruptcy Court chose to deny Stockton\u2019s request and a memorandum of decision on July 13, 2012.\u00a0 The Court implemented a protective order on the confidential information and take an incremental approach to approach to allowing any of the NEV information to be disclosed.\u00a0 The Court reasoned that there is no evidence that Stockton needs to disclose confidential information to prove its eligibility to be a debtor under Chapter 9 yet.<\/p>\n

Unlike a consumer or business filing for bankruptcy<\/a> protection under Chapter 7 or Chapter 13, an order for relief is not immediately entered when a municipality files for protection under Chapter 9.\u00a0 A municipality must prove it is eligible for relief and that the petition was filed in good faith.\u00a0 This will be the next major fight in Stockton\u2019s bid to seek relief under the Bankruptcy Code.<\/p>\n","protected":false},"excerpt":{"rendered":"

The City of Stockton was denied permission to release its 790 page report disclosing confidential information from the neutral evaluation process. The Court determined that an incremental approach to releasing confidential information from the neutral evaluation process would be the best approach if needed at all. <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[58],"tags":[],"_links":{"self":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts\/616"}],"collection":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/comments?post=616"}],"version-history":[{"count":7,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts\/616\/revisions"}],"predecessor-version":[{"id":686,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts\/616\/revisions\/686"}],"wp:attachment":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/media?parent=616"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/categories?post=616"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/tags?post=616"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}