Lawyers for bankrupt San Bernardino, California, and the city's creditors clashed in federal bankruptcy court recently.

The city, now in its third year of bankruptcy, accused the bondholder and its bond insurer allies of trying to overwhelm the city with litigation and derails its efforts to produce a viable exit plan.

The growing tension between the city and some of its biggest creditors come after the Luxembourg-based bank Europäische Pfandbrief-und Kommunalkreditbank AG (EEPK), which holds $50 million in pension obligation bonds, filed a lawsuit against San Bernardino in January.

Vincent J. Marriott, an attorney for EEPK, said the city had misinterpreted the bank's lawsuit, accusing it of trying to "stoke Main Street versus Wall Street fires."

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