THE PROBLEM: Stockton, Calif., is struggling to restructure millions of dollars of debt that threatens to turn the city with the nation’s second-highest foreclosure rate into the largest U.S. city to file for bankruptcy protection.
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THE DEADLINE: A new state law intended to reduce bankruptcy filings required Stockton to reach a deal with creditors by 11:59 p.m. without an announcement. The Central Valley city of 290,000 already has cut police, fire and other services.
NEXT STEP: If mediation fails, the city likely will adopt $26 million in further cuts and could file for bankruptcy protection by Wednesday.
