The news at a glance

Debt: Judge okays municipal bankruptcy

A federal judge has approved bankruptcy for the city of Stockton, Calif., said Mary Williams Walsh in The New York Times, in a ruling that sets up a larger battle “over whether public workers’ pensions can be cut when the city they work for goes bankrupt.” The Central Valley municipality of 300,000—the largest U.S. city ever to go bankrupt—had drastically cut services since filing for debt protection last year, but was constrained by law to continue paying pensions for its former employees. Many states have similar provisions that ban cutting public workers’ pensions, and until now “there has not been a prominent test of those laws in bankruptcy.”

The case could have huge implications across the state and the nation, said Tracie Conein the Associated Press. It creates new vulnerability for CalPERS, California’s employee pension plan and Stockton’s largest creditor. “If Stockton is allowed to impair the CalPERS payments,” said bankruptcy attorney Michael Sweet, “then who knows who’s next?” The city’s creditors have argued “that the pension fund should share any pain in Stockton’s recovery plan.” The court’s ruling makes that possible, but because municipal bankruptcies are so rare, the case raises novel questions about how federal bankruptcy law might apply to pension systems elsewhere.

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Tech: Apple CEO apologizes to Chinese customers

Apple chief executive Tim Cook apologized to Chinese customers this week “after more than two weeks of condemnation in the state-run media of its after-sales service,” said Terril Yue Jones and Poornima Gupta in Reuters.com. The iPhone-maker at first waved away those criticisms, but is now promising to improve its image in its No. 2 market. “Some consider Apple’s attitude to be arrogant, inattentive, or indifferent to consumer feedback,” Cook wrote, adding that Apple has “much to learn about operating and communicating in China.”

Buyouts: American Greetings to go private

American Greetings, the largest publicly traded U.S. greeting card company, has decided “to bid adieu to the stock market,” said Tom Gara in The Wall Street Journal. The Weiss family, whose ancestor founded the Cleveland-based company in 1905, said this week that it would pay $18.20 per share-—a 13 percent premium over its recent closing price-—to buy the firm back from stockholders. The firm claims that more than 80 percent of American adults still buy greeting cards annually, but its revenue dwindled from $2.2 billion in 1998 to $1.7 billion last year.

Regulators: SEC gives thumbs-up to social media

Companies can use Facebook and Twitter to disseminate key information, said Jessica Guynn in the Los Angeles Times. The Securities and Exchange Commission this week approved the practice, after deciding that a post on the Facebook page of Netflix’s CEO did not violate fair disclosure regulations, which require companies to publish material information to all investors simultaneously. “Most social media are perfectly suitable methods for communicating with investors, but not if the access is restricted or if investors don’t know that’s where they need to turn to get the latest news,” said the SEC’s George Canellos.

Patents: Novartis loses court battle

Swiss drugmaker Novartis just lost a “decisive” case, said Krista Mahr in Time.com. India’s Supreme Court rejected the pharmaceutical firm’s bid to patent its leukemia drug Glivec, a generic version of which Indian producers sell at a much lower cost. Critics of the ruling are calling it “a stunning defeat for intellectual-property rights” that will hamper India in attracting foreign investment. But health activists and the Indian drug industry say the judgment is “a win for patients seeking cheaper treatment.”