The bankruptcy trial for the City of Stockton begins.
Attorney for Franklin Templeton Investments James Johnston, argues that the city struck much more favorable deals with other creditors and that the city is making a slow recovery allowing it to pay off more of its debt.
Marc Levinson, an attorney for the city, argues that Franklin Templeton is a billion-dollar investment firm and its potential loss in Stockton amounts to a "rounding error."
Franklin Templeton Investments, which loaned Stockton $35-million, has refused a deal with the city, one which lawyers for the company say would only get the firm about a one cent on the dollar.
City attorneys are hoping that judge refuses the lawsuit and forces Franklin Templeton to take the deal.