Bankruptcy

SAN FRANCISCO — Vallejo retirees have fired another salvo in a battle for scarce funds in the California city’s proposed plan to exit bankruptcy, including conflict of interest accusations against the city’s mayor and law firm.

CHICAGO — A hearing set for next week on Chicago’s request that a Cook County Circuit Court judge dismiss an airline lawsuit that seeks to block $3.36 billion of expansion projects at O’Hare International Airport was pushed back a week as settlement negotiations continue.

BRADENTON, Fla. — In an effort to convince Gov. Rick Scott that Florida’s high-speed rail project is viable and as risk-free to taxpayers as possible, mayors and prominent business groups said Thursday that a proposal is on the table that answers Scott’s concerns.

CHICAGO — The Illinois Supreme Court on Wednesday agreed to hear Illinois’ appeal of a lower court decision invalidating the state’s $31 billion capital budget and the funding streams that support it.

CHICAGO — Faced with the headline risk associated with ongoing reports over its fiscal struggles, Detroit Public Schools was forced to pay a steep premium Thursday on its sale of $231 million of short-term notes.

BRADENTON, Fla. — Gov. Rick Scott told the Florida Supreme Court in a brief Wednesday that the decision to reject federal funds for high-speed rail rests with him and a petition to overturn his decision has come from “state senators whose policy preferences have not prevailed in the political process.”

The Securities and Exchange Commission on Wednesday unanimously agreed to propose amendments to its Rule 2a-7 that would remove all credit rating references from the rule, which requires money market funds to invest in high-quality and very liquid short-term securities.

CHICAGO — Bondholders owed more than $50 million by an Indiana hospital in receivership would receive a mere $3 million or less under a proposed sale of the facility’s most valuable assets.

ALAMEDA, Calif. — Boise County, Idaho, filed for Chapter 9 bankruptcy Tuesday after losing an expensive court case.

As municipalities confront unprecedented budget shortfalls in the aftermath of the Great Recession, some analysts are questioning whether the history of prioritizing bondholders during bankruptcy proceedings will be of much help in gauging future outcomes.

BRADENTON, Fla. — Two Florida senators, a Republican and a Democrat, filed a 281-page petition Tuesday with the state Supreme Court seeking an emergency ruling to block Gov. Rick Scott from rejecting $2.4 billion of federal funds for high-speed rail.

The Cincinnati City Council was poised to vote Tuesday on a number of changes to the city’s $2.1 billion pension system in an effort to tackle an estimated $1 billion shortfall.

Court hearings on a lawsuit challenging Chicago’s authority to proceed with $3.36 billion worth of expansion projects at O’Hare International Airport without airline approval have been pushed back due to ongoing settlement negotiations.

Vallejo has been mired in a messy, prolonged and expensive bankruptcy proceeding since May 2008. But if the California city is “the poster boy of a new era,” as some have suggested, that doesn’t look too bad for bondholders.

WASHINGTON — House Financial Services Committee chairman Spencer Bachus, R-Ala., is warning the Securities and Exchange Commission that he does not support its proposed rules for a municipal adviser registration system because they are too broad and do not reflect congressional intent.

Dealer and bank groups warned they face a regulatory quagmire with the Municipal Securities Rulemaking Board’s draft muni adviser pay-to-play restrictions because the board and Securities and Exchange Commission define terms associated with muni advisers differently and have varying sets of rules for muni and investment advisers.

BRADENTON, Fla. — The Alabama Education Association, its political action committee, and five individuals have filed a federal suit challenging some of the ethics reform laws passed by the state Legislature in a mid-December special session.

CHICAGO — An Iowa water district’s long-awaited plan to restructure $140 million of debt — including $83 million of water revenue bonds — is now on hold due to litigation filed by Bank of America Corp. in an attempt to block a pending asset sale.

After winning long-awaited approval from a bond insurer, Detroit Public Schools plans to enter the market Thursday with $231 million of one-year notes urgently needed to make payroll through August.

With pundits predicting a "wave of bankruptcies" in the municipal market this year, experts say one thing should be kept in mind: the majority of distressed issuers undergoing the Chapter 9 process don't end up stiffing bondholders.