The Second Domino

Stockton’s unions proved intransigent, so it is off to bankruptcy court. This is the second substantial California city (Vallejo was the first) to seek Chapter 9 bankruptcy protection. Many more can be expected to follow if the unions continue their scorched earth strategy.

“Retirees are not going to be happy,” said Ginter, who represented retired Vallejo workers in that city’s bankruptcy. “My prediction is that retiree health care is cut. I wouldn’t be surprised to see it cut to zero.”

Bondholders and current employees will probably also have to take less, said Ginter, who has reviewed city financial reports.

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