LOS ANGELES, April 4, 2013 (GLOBE NEWSWIRE) -- The national securities law firm of Dimond Kaplan & Rothstein, P.A. (www.dkrpa.com) is investigating Stockton, California municipal bond holders' investment losses.
On April 1, 2013, a federal judge granted the city of Stockton, California's request for federal bankruptcy protection. Stockton's bankruptcy could result in municipal bond investors losing millions of dollars. Bankrupt cities must come up with a plan for creditors to forgive some of the debt. That means that holders of Stockton's municipal bonds likely will not get all of their money back. Those would include holders of $165 million in bonds the city issued in 2007.
A host of questions arise out of the bankruptcy, including whether Stockton can fund the retirement pensions of its employees before paying other debts. Stockton reportedly owes $900 million to the California Public Employees Retirement System (CalPERS). If Stockton pays CalPERS before paying other debts, there presumably would be less money left to pay other debts, including Stockton's municipal bond holders.
Investors who purchased Stockton municipal bonds may have claims against the brokerage firms that sold the municipal bonds if the brokerage firms failed to inform investors of Stockton's shaky financial position, i.e., the likelihood that Stockton would not be able to repay its debts.
Dimond Kaplan & Rothstein, P.A. maintains offices in Los Angeles, Miami, New York, and West Palm Beach and represents individual and institutional investors throughout the United States. If you would like to discuss your legal rights and how you may be able to recover your Stockton municipal bonds losses, please email us at info@dkrpa.com or call us, toll-free, at (888) 578-6255.