Vallejo creditors object to plan, eye case dismissal or stay relief

By Caroline Salls

Pittsburgh, July 12 - City of Vallejo, Calif., creditors Ana Menjivar and Wynathen Ketchum objected to the city's proposed plan of adjustment and asked the U.S. Bankruptcy Court for the Eastern District of California to dismiss the city's Chapter 9 bankruptcy case, according to a July 12 court filing.

As an alternative to case dismissal, the creditors asked the court to lift the automatic stay imposed by the city's bankruptcy filing to allow them to go to trial on their overtime wage payment lawsuit.

According to the motion, former Vallejo police officers Menjivar and Ketchum obtained a judgment against the city for failure to pay overtime wages, and their wage claims should have been classified separately under the proposed plan.

Menjivar and Ketchum said the proposed plan "imposes large cuts on unsecured creditors, which are not in the best interests of the creditors," and invokes the cram-down provisions of a Chapter 11 case, which is not fair to unsecured creditors.

The creditors also called the plan "a discharge of debts, which is an illegal conversion of the Chapter 9 [case] into a Chapter 11 business reorganization bankruptcy or into a Chapter 7 proceeding."

A hearing is scheduled for July 28.

Vallejo filed for bankruptcy on May 23, 2008. Its Chapter 9 case number is 08-26813.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.