In re City of San Bernardino

MEMORANDUM OF DECISION RE ISSUANCE OF THIRD PARTY INJUNCTION IN CONJUNCTION WITH CONFIRMATION OF CHAPTER 9 PLAN

Facing a cash flow crisis of significant magnitude in the summer of 2012 with no end in sight, the City of San Bernardino (“City”) declared an emergency under state law and filed a petition under Chapter 9 1 in the Bankruptcy Court on August 1, 2012. After a hard-fought battle over eligibility which resulted in this court finding the City was eligible because it had filed its chapter 9 petition in good faith and desired to propose a plan to adjust its debt 2 , the City set about to propose such a plan. It began by shoring up its financial records so that its income and expense projections were reliable. This gave it an accurate picture of how it must impair its creditor body in order to achieve restructuring of its debt and revitalization of City services. It mediated where possible and litigated where necessary to eventually be able to propose its Third Amended Plan of Adjustment (“Plan”) which was by and large a consensual plan. After multiple confirmation hearings to resolve the few but significant objections to the Plan, on December 6, 2016, this court overruled the…