Bankruptcy

Ambac Financial Group Inc., the holding company for bankrupt bond insurer Ambac Assurance, has agreed to settle a lawsuit claiming it misled shareholders about the risks the company took on insuring subprime mortgages.

WASHINGTON — A federal court in New Jersey has approved UBS Financial Services Inc.’s $47.2 million settlement with the Securities and Exchange Commission over bid-rigging of municipal bond-related contracts as well as the amounts of restitution that are to go to each of 105 state and local issuers that were defrauded.

MBIA Insurance has filed a motion in the New York State Supreme Court seeking documents from Credit Suisse about residential mortgage-backed securities it insured. According to the lawsuit, Credit Suisse failed to follow guidelines it established with the insurer and MBIA has suffered large losses as a result.

SAN FRANCISCO — A bill that would force California municipal governments to undergo mediation before allowing them to file for bankruptcy is moving through the Legislature.

The troubled city of Montebello, Calif., took another financial hit last week when federal housing officials suspended funding to the city and demanded repayment of $5 million in grants, according to local news reports.

SAN FRANCISCO — At its inception the South Bay Expressway toll road was promoted as a model public-private partnership. It took ages to build, then quickly plunged into bankruptcy.

WASHINGTON — UBS Financial Services Inc. has agreed to pay more than $160 million to settle antitrust, securities fraud, tax and other charges with three federal agencies and 25 state attorneys general for rigging bids for at least 100 reinvestment transactions in 36 states, threatening the tax-exempt status of more than $16.5 billion of municipal bonds.

CHICAGO — The Xenia Rural Water District’s financial position worsened in 2010, moving it closer to insolvency and increasing the pressure on the Iowa agency and its creditors to come to some agreement that likely includes debt forgiveness, according to a state audit.

Detroit Mayor Dave Bing met with Michigan Gov. Rick Snyder and legislators last week to push a deficit-elimination plan that hinges on the passage of new state laws.

CHICAGO — Indiana legislators last week passed a $28 billion two-year general fund budget and several bond-related bills but failed to pass a controversial measure allowing fiscally distressed municipalities to file for bankruptcy.

The Securities Industry and Financial Markets’ Association is urging the Municipal Securities Rulemaking Board to withdraw its draft broker’s brokers rule and leave the existing regulatory and enforcement scheme intact.

Whether the New York Insurance Department can appeal a ruling that ordered it to hand over e-mails and documents regarding the restructuring of bond insurer MBIA Insurance Corp. could be decided soon.

WASHINGTON — With financial regulators combing through pension reporting by state and local governments, the National Association of Bond Lawyers unveiled guidance Monday to boost issuers’ disclosure practices.

SAN FRANCISCO — The restructuring of $2 billion of San Joaquin Hills toll-road debt appears to have bondholders on board since the alternative is a likely default.

The board of the bankrupt Sierra Kings Healthcare District in California earlier this month approved a letter of intent to join Adventist Health.

CHICAGO — Michigan Gov. Rick Snyder warned Wednesday that 23 school districts across the state, most clustered around the Detroit area, qualify for a state takeover under its new emergency financial management law.

CHICAGO — Illinois could end the fiscal year owing more than $8 billion in bills, a level that underscores the need to cut spending in order to stabilize its balance sheet, Comptroller Judy Baar Topinka warned Wednesday.

The Municipal Securities Rulemaking Board has filed a rule change with the Securities and Exchange Commission that increases the price of a one-year historical transaction-data report to $2,500 from $600.

Under fire from congressional Republicans to slow down derivatives rulemaking, the Commodity Futures Trading Commission voted Wednesday to reopen and extend by 30 days the public comment period on proposed derivatives rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

WASHINGTON — This year will be the “toughest year so far” for state and local governments since the economic plunge began in 2008, with rating downgrades expected to outnumber upgrades, according to Moody’s Investors Service.