By Ryan Hagen, The Sun
Posted: 06/17/15 – 11:24 PM PDT |
RIVERSIDE >> The attorney representing bondholders who’ve invested about $50 million in San Bernardino came out swinging Wednesday in the first bankruptcy hearing since the city filed a bankruptcy exit plan that would pay bondholders only 1 percent of that.
The comments by attorney Vincent J. Marriott III separated him from the city’s other creditors, who generally praised the progress in a case that began with a filing in August 2013.
To keep that momentum going, U.S. Bankruptcy Judge Meredith Jury on Wednesday set a hearing for Oct. 8 to determine whether the financial disclosure statement filed along with the Plan of Adjustment is adequate. Such a hearing is a standard step in bankruptcy cases, often requiring several hearings for a large case, and the city’s situation could change significantly by then, she said.
Marriott charged that the city’s foot-dragging was shown by not proposing a date for that hearing, as would be standard. And he criticized it for putting forward a plan he says might not work because, he said, it depends on changes to the city charter that won’t be voted on until 2016 and could be rejected like the last charter amendment the city proposed.
“(The city’s filing) fails in our view in what was intended to be its central purpose, which was to finally move this case along,” said Marriott, whose request led to the May 30 filing deadline that the city beat by one day. “And raises once again the question of what the city has been doing for the almost three years that it has been under the protection of Chapter 9 (bankruptcy).”
The city’s bankruptcy attorney, Paul Glassman, said the plan does not depend on voters approving changes to the charter.
“We’re simply talking about a reorganization that would assist the city and be viewed as helpful,” Glassman said. “We worked very hard to put together a plan that is not dependent upon an election happening.”
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