Update: City officials may suspend bond payments and try to cut a deal with creditors to avoid filing bankruptcy
Word out this week that Stockton, California may be on the road to filing the largest municipal bankruptcy in US history.
Before they can file they must comply with a California law that requires them to declare a fiscal emergency. This requires them to spend 60 days in negotiations with their creditors, which is largely a sop from Democrats to the labor unions.
If the case is filed it could run $ 20 million in legal fees.
More to come as this story develops.