Bankruptcy

SAN FRANCISCO — California Controller John Chiang has ordered an investigation of the troubled city of Hercules after uncovering what he calls major discrepancies in its financial reports.

Chester, which has been in Pennsylvania's Act 47 program for distressed communities, has received an A rating from Standard & Poor's.

When Rhode Island sold $169 million of general obligation bonds on Wednesday after a two-day retail period, two words echoed amid huge jumps in yield: Central Falls.

Nearly a year after a municipal corruption scandal blew up in the Los Angeles County city of Bell, resulting in the forced resignation of top officials, new leaders say the city is beginning to take the initial steps toward fiscal health.

BRADENTON, Fla. — Emmet & Co. and First Manhattan Co. have filed suit against Catholic Health East and Merrill Lynch claiming that $132.26 million of escrowed bonds issued by conduit entities in three states were improperly called.

DALLAS — While other Arizona cities compete for a $100 million private prison on behalf of the Arizona Department of Corrections, Goodyear has threatened to sue the state if it decides to build another lockup in its backyard.

Mayor Linda Thompson implored Harrisburg City Council members to approve her financial recovery plan, which will go before the council for a final vote at a special legislative session next Wednesday.

House Financial Services Committee chairman Spencer Bachus, R-Ala., last week told mayors in Jefferson County that he believes the right decisions will be made by county commissioners dealing with the sewer debt crisis, according to the Birmingham News.

The 11th Circuit Court of Appeals in Atlanta on Oct. 4 will hear arguments in the appeal filed by former Jefferson County Commissioner Gary White.

CHICAGO — Chicago and the Illinois Regional Transportation Authority filed lawsuits Tuesday against the cities of Kankakee and Channahon for their roles in tax-sharing agreements with retail companies that allow them to avoid collecting the Chicago area's higher sales tax rates.

CHICAGO — The emergency manager of Pontiac, Mich., said his plan to raise new money for the cash-strapped Detroit suburb relies on a court-ordered property tax increase.

DALLAS — An environmental lawsuit by the Sierra Club could impede bond issuance for one section of a 170-mile toll loop around the Houston area known as the Grand Parkway.

Gov. Rick Snyder last week asked the Michigan Supreme Court to rule on a lawsuit that targets the state's controversial emergency-management law.

WASHINGTON — The Municipal Securities Rulemaking Board has filed a proposed rule with the Securities and Exchange Commission that would require muni advisors to establish supervisory systems to ensure they and their "associated persons" comply with SEC and MSRB rules.

A 2011 bill transferring $101.7 million from a highway transportation revolving fund into the general fund was constitutional, Oklahoma solicitor general Patrick Wyrick contended last week in a hearing before a state Supreme Court referee.

CHICAGO - A trio of nonprofit hospitals in the Chicago area, including the prominent Northwestern Memorial's Prentice Women's Hospital, are expected to appeal the Illinois Department of Revenue's decision earlier this week to deny them their property-tax exemptions for failing to provide sufficient charity care.

Los Angeles County supervisors Tuesday ordered an investigation into the finances of the troubled city of Vernon.

Bond insurer CIFG Assurance NA sued Goldman, Sachs & Co. and M&T Bank Tuesday for fraud and breach of contract involving its commitment to guarantee $275 million of mortgage-backed securities.

A ruling by the 11th U.S. Circuit Court of Appeals in June handing Georgia a victory over drinking water withdrawal rights from tributaries in the Atlanta area may be in jeopardy. Alabama and Florida last week asked the appellate court to reconsider its ruling in the so-called water war between the states that has gone on well over a decade.

The AARP joined with two other senior-citizen groups to file a friend of the court brief to the Michigan Supreme Court last week, arguing that the state’s new law taxing retirement income is unconstitutional.