"The creditors had urged [Judge Christopher] Klein to reject the bankruptcy plea because, they said, Stockton had refused to treat its pension obligations as debts to be reduced through bankruptcy, thus discriminating against private bondholders by forcing them to take big haircuts. But the details of Klein's ruling imply that the city and CalPERS may not prevail on the pension issue when he weighs the city's plan to deal with its debts -- a plan that now excludes CalPERS as a creditor."

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