Bankruptcy

The bankrupt city of Vallejo has hired Deborah Lauchner as its new finance director.

WASHINGTON — The Securities and Exchange Commission should rank nationally recognized credit rating agencies based on performance and should help investors hold them accountable in civil lawsuits over unjustifiable inflated ratings, a bipartisan congressional panel recommended Wednesday.

CHICAGO — Detroit Mayor Dave Bing told the City Council Tuesday that failure to implement his budget proposals would lead to a state-mandated emergency financial takeover.

SACRAMENTO — Vallejo, Calif., is closing in on settlements with creditors that would smooth its escape from bankruptcy, according to its attorney.

CHICAGO — Iowa’s Xenia Rural Water District has proposed a five-year restructuring plan that calls for investors who hold $83 million of revenue bonds to receive full payment. However, it hinges on the willingness of other creditors to “share in the pain” of restoring the district to fiscal solvency by forgiving some debt, said interim executive director Marc DeLong.

WASHINGTON — The prospect for a federal government shutdown grew more ominous Thursday, leaving state and local groups with unanswered questions about whether federal payments will be halted if lawmakers fail to reach agreement on a fiscal 2011 budget compromise before midnight Friday.

BRADENTON, Fla. — Jefferson County, Ala., must restructure its troubled debt or take “other significant reorganization activities,” according to the county’s first audit in three years.

SAN FRANCISCO — In this city known for its eccentricities, why should retiree benefit reform be any different?

CHICAGO — The efforts of five Wisconsin school districts to recoup their ill-fated $200 million investment in collateralized debt obligations have received reinforcement in the form of possible Securities and Exchange Commission action against an investment bank for its role in the transaction.

Pennsylvania’s capital city of Harrisburg should pursue negotiations with stakeholders to work out repayment of its outstanding debt before resorting to filing for bankruptcy.

A petition has been filed with the Florida Supreme Court challenging Gov. Rick Scott’s right to freeze state rule-making procedures, which is an action he took shortly after taking office in January.

SAN FRANCISCO — Hercules, Calif., is dealing with a fiscal and political mess that will require an effort worthy of its name to right its finances and pay debt service on $162 million of bonds.

Municipal bond issuers and underwriters should review all documents related to their pension disclosures, even those that were not prepared with disclosure in mind, an attorney told muni market participants Friday.

Nassau County last week opted to drop its lawsuit against the Nassau County Interim Financing Authority to end a control period that NIFA implemented in late January.

WASHINGTON — Self-regulatory officials may assess fees on municipal advisers based on their advisory activity and are focused on disclosure to retail muni investors.

The dissenting bondholder in the proposed settlement for the Ambac bond insurance policy issued for the bankrupt Las Vegas Monorail wants its dispute with the bond trustee moved to Nevada.

WASHINGTON — A former municipal derivatives trading desk manager at Banc of America Securities LLC has pleaded guilty to one criminal count of engaging in a conspiracy to falsify bank records in connection with a scheme to rig bids and pay kickbacks for investment agreements and other financial contracts in the muni market.

WASHINGTON — The Securities and Exchange Commission voted unanimously Wednesday to approve a proposed rule that would exempt municipal securities from credit-risk retention requirements imposed in the wake of the financial crisis.

CHICAGO — The Detroit suburb of Hamtramck has pressed Michigan officials to allow it to become the state’s first city to file for bankruptcy. Now it has reached a financial agreement with Detroit that, together with a hoped-for $2.5 million state loan, could stabilize its finances for at least the next 10 months.

Cravath, Swaine and Moore LLP will file Thursday its analysis of a potential bankruptcy filing for Harrisburg, Pa., but the City Council may not release that report to the public until next week.