In re City of Stockton, California

Here is another facet of the balance between state sovereignty and federal bankruptcy power in a chapter 9 case regarding adjustment of debts of a municipality. This time it is citizen litigation *804 challenging a ballot description of a tax proposed to the electorate by the City of Stockton.

The movant intends to petition a state court for an order requiring the City to modify its ballot statement describing a tax increase on the ballot in an upcoming election. The ballot-statement issue potentially presages another dispute whether state law requires that voter approval be by a simple majority or by a super-majority-

The question here is whether it is necessary for the bankruptcy court to grant relief from the automatic stay of 11 U.S.C. § 362 (a) or from the additional automatic stay of 11 U.S.C. § 922 (a) before the ballot-statement litigation commences. Although the analysis may be straightforward to bankruptcy specialists, the paucity of judicial decisions invites confusion. Parsing those sections in light of the Bankruptcy Code’s definition of “claim” for which the common denominator is a right to payment of money leads to the conclusion that relief is not…