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Stockton, Calif., Files For Bankruptcy

The city of Stockton, Calif., has officially filed for Chapter 9 bankruptcy protection, The Stockton Record writes.

As we reported on Wednesday, the city has a $26 million budget shortfall. Now, it's the largest city in U.S. history to file for such protection. The city has a population of about 300,000.

According to the Record:

"Mayor Ann Johnston [D] said in a prepared statement that filing for bankruptcy was necessary to correct the ailing city finances for the benefit of the community. 'We are extremely disappointed that we have been unable to avoid bankruptcy,' Johnston said. 'We will emerge from bankruptcy with a solid financial future.'

"City leaders say generous pay and benefits for its work force and overborrowing on expensive projects contributed to the crisis. The fall sped up with the nation's economic recession and foreclosure meltdown, which started in 2008."

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