June 14, 2013

CalPERS wins round in city's bankruptcy case

CalPERS won a preliminary skirmish against a bond insurance company Thursday in the battle over San Bernardino's bankruptcy case.

A bankruptcy judge in Riverside granted CalPERS' request to ban the Winston & Strawn law firm from representing bond insurer National Public Finance Guarantee Corp. because of a conflict of interest. The firm had hired a lawyer who used to work for CalPERS on the San Bernardino and Stockton bankruptcies.

Winston & Strawn argued that there was no conflict because the firm had policies keeping the lawyer from disclosing information about the California Public Employees' Retirement System.

CalPERS is fighting with bond insurers in both San Bernardino and Stockton. The bond firms say CalPERS should be treated like other creditors, even if it means taking smaller pension contributions from the cities. CalPERS says public pensions are sacred and it won't take less than it is owed.

San Bernardino is millions in arrears on its CalPERS payments, while Stockton has kept up its payments.

Call The Bee's Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

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