A federal judge has ruled in favor of the city of Stockton, California allowing the city to enter bankruptcy.
This is pretty much round one of dozens though. The city’s creditors were asking the judge to throw the case out on the grounds that the city was either not bankrupt or had failed to negotiate in good faith with creditors in trying to avoid bankruptcy.
It is quite possible this ruling will be appealed all the way to the US Supreme Court because it will set precedent for other municipalities wanting to file Chapter 9 bankruptcy.
Beyond that there will be future battles over the proposed payment plans submitted by the city as well as many other technical issues.
But for now Stockton is officially bankrupt.