From Reuters
''Bond insurer MBIA Inc challenged Stockton, California's eligibility for bankruptcy, making an argument with profound implications for the state -- that the city can cut pension benefits.
MBIA in a court filing said the city's failure to ask for concessions from the California Public Employees' Retirement System pension fund showed that it had not negotiated with creditors in good faith, and it argued that the city's plan for recovery was doomed because it did not touch pensions.
The filing sets a roadmap for a battle, in or out of bankruptcy court, in which Wall Street takes on the largest public U.S. pension fund, Calpers, and troubled cities and counties watch.''
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