November 23, 2014
SACRAMENTO, Calif. (AP) - A judge is set to hear closing arguments in the bankruptcy trial of the California city of Stockton.
If the judge accepts Stockton's Chapter 9 bankruptcy protection application, it would become the most populous U.S. city to enter bankruptcy.
The closing arguments in a Sacramento courtroom are expected on Wednesday morning. The judge could decide immediately after whether to accept Stockton's Chapter 9 filing.
Lawyers for the city have said Stockton has cuts its budget and services to the bone and has no choice but to enter bankruptcy.
But the city's creditors counter that Stockton officials have failed to cut enough spending or even seek a tax increase to avoid Chapter 9.
They want to keep Stockton out of bankruptcy, which would likely allow the city to avoid repaying debts in full.