Stockton creditor eyes appeal of order confirming plan of adjustment

By Kali Hays

New York, Nov. 14 – Creditors of the City of Stockton, Franklin High Yield Tax-Free Income Fund and Franklin California High Yield Municipal Fund, filed an appeal of the order confirming the city’s adjustment plan with the U.S. Bankruptcy Court for the Eastern District of California.

The city received confirmation of the plan Oct. 30

As previously reported, Franklin has a combined claim of $35 million against the city and opposed confirmation of the plan, arguing that creditor treatment under the plan in inequitable.

Stockton’s adjustment plan allows Franklin to recover about $4 million of its claim while current pensions of city workers stand to be paid in full.

Franklin also filed a separate motion with the court seeking a stay of the confirmation order until its appeal is resolved.

A hearing on the appeal is scheduled for Dec. 10.

Stockton filed for bankruptcy on June 28, 2012 under Chapter 9 case number 12-32118.

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