California city heading to bankruptcy court

Its largest creditors are bond insurers who helped the city refinance pension debt. They will argue that Stockton is solvent and hasn’t cut spending enough.

For years Stockton’s salaries,benefits and borrowing were based on anticipated long-term developer fees and increasing property tax revenue. But those were lost in a flurry of foreclosures.

The city has become emblematic of both government excess and the financial calamity that resulted when the nation’s housing bubble burst.