San Bernardino Seal

San Bernardino is moving toward a confirmation hearing — the final stage in a bankruptcy that began in 2012 — in October after a somewhat bumpy hearing Thursday with the last creditor to object to the stage before that.

By Ryan Hagen, The Sun
Posted: 06/16/16 – 6:18 PM PDT |

RIVERSIDE >> San Bernardino is moving toward a confirmation hearing — the final stage in a bankruptcy that began in 2012 — in October after a somewhat bumpy hearing Thursday with the last creditor to object to the stage before that.

That penultimate stage is approval of the so-called disclosure statement, and most of the city’s creditors reached settlements with the city that require them to support the disclosure statement and confirmation of the Plan of Adjustment.

But attorneys for an organization called the Big Independent Cities Excess Pool — BICEP — took issue with the way they said BICEP was described in the disclosure statement.

BICEP is a group of six mid-sized cities that pool coverage for liability claims, including an unknown number of civil rights claims against San Bernardino that total more than $1 million. The city and BICEP disagree about how to handle those claims of more than $1 million.

The city’s filing included a section that it said was word-for-word the position of BICEP,

That objection “incurred the ire” of U.S. Bankruptcy Judge Meredith Jury.

“This is extraordinary, and I had never seen anything like it,” Jury said of BICEP’s objection, “where an objecting creditor is given the full opportunity to say whatever they wanted. The opponent adopted their language verbatim. And yet they’re still crying.”

Franklin Adams, the attorney for BICEP, said there was a simple explanation for that: The city wasn’t telling the truth about the language being verbatim, despite saying it did.

“We gave them language. They did not put it in,” Adams said. “They have misled the court today to our detriment. That’s not the only place.”

Most of BICEP’s statement was included in the city’s, but it omitted a few sentences, said the city’s bankruptcy attorney, Paul Glassman.

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