A federal judge has ruled Stockton, California, is eligible for bankruptcy protection, rejecting complaints from the city’s Wall Street creditors. The ruling sets the stage for a battle over the future of employee pensions after creditors objected to the city’s plans to repay its debt to the state pension system in full. U.S. Bankruptcy Court Judge Christopher Klein ruled creditors had acted in bad faith when they walked away from negotiations, but has yet to decide whether pensions can be cut. Stockton became the largest city in the United States to file for bankruptcy last June following the collapse of the housing market and cuts that included slashing the police department by 25 percent.