Federal Judge : Call Cities Can't Re-Write Federal Bankruptcy Code

The Sacramento Bee reports:

A judge’s potentially groundbreaking ruling in the Stockton bankruptcy case should send messages loud and clear.

To the Legislature – that it can’t rewrite federal bankruptcy law. To the city of Stockton, Franklin Templeton Investments and CalPERS – that they need to make a deal. And to local officials across California – that they need to get more serious about pension reform.

In his verbal ruling, Judge Christopher Klein declared Wednesday that public employee pensions are not off-limits in bankruptcies. He suggested that insolvent California cities could choose to reduce already-promised pension payments and even walk away from the California Public Employees’ Retirement System.

Just a reminder.