A decade later, San Bernardino’s bankruptcy case is finally closed

San Bernardino city limits sign
A federal judge has closed out the bankruptcy case filed by San Bernardino a decade ago.
(Grant Hindsley / Associated Press)

A federal judge has closed out the bankruptcy case filed by San Bernardino when it grappled with a dire cash shortage a decade ago.

The city said in a statement Monday that U.S. Bankruptcy Judge Scott Clarkson closed the case last week because San Bernardino had resolved claims and had shown it could meet its outstanding long-term financial obligations. When the city filed for bankruptcy Aug. 1, 2012, vendors hadn’t been paid and cash was running out for payroll.

“The grueling and deep cuts we all experienced are in the rearview mirror of San Bernardino’s history,” Mayor John Valdivia said.


Officials said the city of 220,000 people is now in a much better financial position and has been tackling street-paving and tree-trimming projects and hiring much-needed staff.

Residents of Oak Glen were ordered to evacuate just after 9 p.m. Monday as the remnants of Tropical Storm Kay brought flash flooding to parts of Southern California.

Sept. 12, 2022

For the current fiscal year, the city has forecast a $2.5-million budget surplus — a far cry from the $45-million budget shortfall that was projected when it entered bankruptcy, the statement said.

A decade ago, San Bernardino was in tough financial straits thanks to weak property and sales tax revenues, rising pension costs and a decline in state redevelopment funding. It went into bankruptcy amid an unprecedented wave of American cities doing so, including Vallejo, Calif., and Detroit.

In 2017, San Bernardino began paying creditors again under a bankruptcy exit plan approved by the judge. At the time, there were more than 1,000 claims against the city.