The battle between the now-bankrupt city of Stockton, California, its bondholders, and the California Public Employees Retirement System may end up in Supreme Court, according to lawyers representing all sides in the dispute.

Experts say the fight will help explain who will eventually be responsible for what as more financially distressed municipalities try to get rid of expensive public employee retirement obligations. The bond companies that issued Stockton’s $285 million in debt are now being asked to take a loss, but not get CalPERS financially involved, and they are challenging the retirement system in court.

Some attorneys say that cities looking to escape their financial obligations cannot essentially “pick and choose” the parts of the federal bankruptcy code that suit them. “Not much trumps federal bankruptcy law when federal bankruptcy law applies,” Ballard Spahr partner William Rhodes told the Financial Times. “I hope we get clarity from a court ruling on the fact that goes to the merits of the case. If it gets appealed, even better. It won’t stop at the trial level.”