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San Bernardino gets small victory in bankruptcy court
Unions representing police, firefighters and middle managers are asking bankruptcy Judge Meredith Jury to lift a stay that otherwise would prevent a lawsuit while the city is in bankruptcy court. That would allow them to ask other courts to rule on their contention that the city violated labor law in the way it imposed contracts requiring workers to pay the full employee share of pension contributions and otherwise reduced benefits. Jury said early in Thursdays hearing that, before hearing arguments in court, she supported the city on that point.My tentative ruling, if I were to rule without prejudice, would be to deny the relief from stay, she said.Attorneys for the unions then said it would be unwise to rule before deciding whether the city was eligible for bankruptcy protection, a point the city didnt contest.So discussion moved back to discovery, or what documents and testimony the city will be required to provide.Jury said she thought all relevant information could be gathered by giving one day with financial Advertisementconsultant Michael Busch of Urban Futures, who is now acting as the citys finance director, and half a day each with two other officials. She scheduled a decision on whether to require more interviews which attorneys for several groups opposing the citys efforts say is important for their case for Tuesday at 1:30.The city has already made thousands and thousands of documents available, at significant cost to the insolvent city, said the citys bankruptcy lawyer, Paul Glassman of Stradling Yocca Carlson Rauth.That may be, but digging through those documents for the relevant information could be prohibitively expensive for employee groups, said Ron Oliner, the attorney representing the San Bernardino Police Officer Association.To say, shotgun blast, heres all this stuff, is a little disingenious, Oliner said.Oliner also criticized what he said was apparent collaboration between the city and bondholders, the largest group to which the city owes money except for the California Public Employee Retirement System.The bondholders have totally sidled up to the city in an almost sickening way, because the city has done nothing to harm them, Oliner said. .It looks like an attempt to get out of this bankruptcy on the backs of labor. The citys pendency plan the budget precursor under which its operating plans to defer nearly $13 million in required payments to CalPERS and more than $3 million in bond payments, among other delayed payments.After a bondholders attorney objected to what she called almost a personal attack, Jury said she knew Oliners charge was false.Overall, the lack of progress from Thursdays hearing was discouraging, said bankruptcy attorney Karol Denniston of San Franciscobased Schiff Hardin, who helped write Californias bankruptcy law but is not involved in San Bernardinos case.