Vallejo Retirees Fight Back

The Bond Buyer reports:

Vallejo retirees have fired another salvo in a battle for scarce funds in the California city’s proposed plan to exit bankruptcy, including conflict of interest accusations against the city’s mayor and law firm.

The assertions by the retiree committee, which represents 800 retired city workers in the court battle, are part of a long list of objections filed in court last month to Vallejo’s legal exit plan.

The legal gripes are a reaction to the city’s proposal to pay retirees and other unsecured creditors only 5% to 20% of their claims out of a $6 million pool over two years, though some would be paid more through insurance.

Vallejo has received more than a thousand claims, both secured and unsecured, worth almost $500 million.

Union workers also plan to join the legal battle over the slashed payments.

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