October 2, 2014
SACRAMENTO, Calif. (AP) - A court ruling has made Stockton, Calif., the most populous city in the nation to enter bankruptcy.
U.S. Bankruptcy Judge Christopher Klein said in a Sacramento courtroom on Monday that he had accepted the city's bankruptcy application.
Bankruptcy will likely allow the city to avoid repaying its debts in full. Lawyers for the creditors argued that the city had not cut enough spending or sought a tax increase to avoid bankruptcy.
Attorneys for the city countered that the city's budget and services had been cut to the bone.
Klein heard closing arguments in the case last week.
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