(Bloomberg) -- San Bernardino, the bankrupt California city, was sued for keeping up payments to the state’s powerful retirement system without giving equal treatment to pension-bond holders, a conflict facing other struggling U.S. municipalities.

The lawsuit presents a novel legal challenge for the California Public Employees’ Retirement System, which last year lost an argument in federal court over whether it deserved more protection than Wall Street.

Pension-bond holder Erste Europaische Pfandbrief- und Kommunalkreditbank AG sued San Bernardino yesterday in federal bankruptcy court in Riverside, California, claiming equal status with Calpers. The bank, which holds about $50 million in pension obligation bonds, didn’t name Calpers in the suit.

“Any payment of the Calpers pension obligation portion requires equivalent payment of the bondholder pension obligation portion,” the company, a unit of Frankfurt-based Commerzbank AG, said in the filing.

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