California city files bankrupcy- being watched closely by other struggling US cities and towns that may also seek bankruptcy protection.
A court has approved the California city of Stockton's bankruptcy filing, making it the most populous US city ever to enter bankruptcy protection.
A federal judge said without bankruptcy protection, Stockton would be unable to provide basic government services.
Officials were forced to make dramatic spending cuts to patch a budget deficit - roughly $26m (£17m) this year. The city eliminated a quarter of its police officers, one third of the fire department staff and 40% of all other employees. It also cut wages and medical benefits.
Stockton's unemployment and violent crime rates now rank among the worst in the nation.
The city's case was being watched closely by other struggling US cities and towns that may also seek bankruptcy protection.
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