Stockton bankruptcy mediation extended | News
STOCKTON, CA - Stockton's mediation process, required by AB 506 before a city files for bankruptcy, was extended another 30 days.
City spokesperson Connie Cochran said mediation participants, the city's creditors, agreed to extend negotiations through June 25.
"This is a good sign," Mayor Ann Johnston said. "It means that our creditors understand our fiscal circumstances and it indicates that they believe that it is worth the investment of time and resources to work toward a solution."
In late February, the Stockton City Council approved moving forward with the process to file for bankruptcy. Under AB 506, cities are required to meet with creditors in order to develop a repayment plan in order to avoid filing for bankruptcy. If a deal cannot be met, the city can then move ahead to file for bankruptcy.
"We are doing everything in our power to avoid bankruptcy," Johnston said. "Mediation is our last and best chance to come to an agreement and get the City of Stockton on firm financial footing that will restore services and allow us to become fiscally solvent."
The initial mediation period lasts for 60 days.