Bankruptcy

HARRISBURG, Pa. - The rejection by Harrisburg’s City Council of a financial recovery plan by a state-sponsored panel has Pennsylvania's capital city scrambling.

WASHINGTON - An investor holding bonds wrapped with insurance from ACA Financial Guaranty Corp. has filed a lawsuit against the moribund insurer, which says it is no longer obligated to pay insurance claims related to the bonds following the issuer’s Chapter 9 restructuring agreement.

WASHINGTON - A closely watched appeals court case that could determine whether investors may sue firms over allegedly faulty disclosure for auction-rate securities has pitted the Securities and Exchange Commission against a broker-dealer group.

BRADENTON, Fla. - A new Florida agency created to fund statewide Property Assessed Clean Energy improvements filed a complaint to validate the issuance of up to $2 billion of municipal bonds.

Jefferson County, Ala., filed a brief notice with the bond market on Tuesday stating that it once again defaulted on its sewer warrants. The county said warrants were purchased by banks that entered into standby warrant purchase agreements.

The state-appointed receiver overseeing Central Falls, R.I., asked retired police officers and firefighters on Tuesday for $2.5 million in permanent pension and health-benefit concessions for the city to avoid bankruptcy.

SAN FRANCISCO - California redevelopment agency proponents have filed a lawsuit in state Supreme Court to block laws that would kill or drastically curtail the RDAs to fill a gap in the recently adopted budget.

The Central Falls, R.I., City Council will hold its first public meeting in more than a year after Gov. Lincoln Chafee signed a bill requiring more input from local elected officials in communities under state receivership.

BRADENTON, Fla. - Jefferson County is asking creditors holding its $3.14 billion of defaulted variable- and auction-rate sewer warrants to take a haircut of $1.3 billion, the Birmingham News said Sunday.

WASHINGTON - The Financial Industry Regulatory Authority fined seven firms a total of $362,500 for violations of municipal securities rules.

Massachusetts Attorney General Martha Coakley has asked a bankruptcy judge to review the proposed $38 million sale of Quincy Medical Center Inc. to Steward Health Care System LLC.

CHICAGO - Moody's Investors Service this week said it views positively recent court rulings in Colorado and Minnesota dismissing litigation that challenged legislative cuts to retirees' pension cost-of-living increases, and expects the rulings will spur other states to act.

WASHINGTON - Securities and Exchange Commission chairman Mary Schapiro is expected to preside over a one-day hearing on the municipal securities market near Birmingham, Ala., in two weeks, sources said.

WASHINGTON - George K. Baum & Co. and CDR Financial Products, Inc. were bidding agents for muni reinvestment transactions involving J.P. Morgan Securities where bid-rigging occurred, according to court and bond documents as well as transaction participants.

Gov. Lincoln Chafee has signed a bill requiring Rhode Island municipalities to guarantee that lenders get first rights to property taxes and general revenue, should the government entity file bankruptcy.

The financial troubles in North Las Vegas may be getting so bad the state government may step in, according to local press reports.

WASHINGTON - First Southwest Co., as bidding agent for a repurchase agreement related to a $233 million bond deal in Texas for which it was financial adviser, improperly allowed JPMorgan Securities to lower its bid for the repo, reducing the issuer's investment rate, according to documents and transaction participants.

CHICAGO - The Lombard, Ill., Public Facilities Corp. drew $1.5 million from reserves to complete July 1 debt service payments on a portion of its $187 million of bonds issued to help finance a hotel and conference center that is struggling to remain solvent.

Harrisburg's City Council will hold a special legislative session at 6 p.m. Tuesday to accept or reject a proposed financial recovery plan for Pennsylvania's capital city, which is saddled with $220 million of bonds outstanding on its incinerator.

Assured Guaranty Corp. won't seek to appeal a New York State court's ruling that it must honor coverage of defaulted debt issued by the Xenia Rural Water District in Iowa.