Reuters

Wednesday, Feb 3, 2016 – 8:10pm EST
SAN FRANCISCO | By Jim Christie

The bankrupt city of San Bernardino, California, said in a court filing on Wednesday it had reached a tentative agreement with the creditor holding its pension obligation bonds on how the debt would be treated in the city’s plan to exit bankruptcy but did not provide details.

San Bernardino in its filing in U.S. Bankruptcy Court for the Central District of California said the deal was struck on Jan. 5 and that it was working to document terms, which remain confidential for now.

The city, which filed for bankruptcy in 2012, had been planning to pay $655,000 plus interest on nearly $50 million in pension obligation bonds held by a Luxembourg-based bank.

The bank, Erste Europaische Pfandbrief-und Kommunalkreditbank AG, had been at the forefront of fighting San Bernardino’s plans to adjust more than $150 million in claims.

The disclosure of the agreement follows a vote on Monday by San Bernardino’s Common Council to approve a settlement ending disputes involving more than $40 million in claims with the city’s firefighters, a move the city said it expected would advance the plan it is drafting to exit bankruptcy.

The agreement endorsed unanimously by the council clears the way for the city to fold its fire department into San Bernardino County’s fire services district as a critical cost-cutting measure.

To read expanded article, click here.