Bankruptcy

Harrisburg and Pennsylvania officials are working on securing a potential bank loan so the city can meet a $3.3 million debt-service payment due Sept. 15 and avoid a default.

New Jersey Attorney General Paula T. Dow Thursday announced that JPMorgan will pay the state $1.1 million and buy back auction-rate securities from New Jersey investors to resolve allegations that the bank failed to disclose the risks involved with the ARS market.

WASHINGTON — The Municipal Securities Rulemaking Board has issued draft guidance warning broker’s brokers of their obligations under its rules following recent enforcement actions by the Securities Exchange Commission and the Financial Industry Regulatory Authority alleging rule violations.

DALLAS — Houston’s transportation authority, Metro, faces delays and growing costs on a $1.5 billion light-rail expansion after its purchase of 103 rail cars from a Spanish manufacturer was found to violate federal law.

WASHINGTON — Adrian Scott-Jones, a former agent of a Florida-based guaranteed investment contract broker, pleaded guilty to two separate fraud conspiracies in connection with the brokering of GICs in the municipal market.

A grand-slam judgment last month has emboldened the lawyers and investors seeking to recoup losses on $2 billion in municipal arbitrage funds run by Citigroup.

CHICAGO — Investors who hold $23 million of defaulted steam-plant bond anticipation notes, which the city of Menasha put its appropriation pledge behind, warned in their latest court filing that the municipal world is following their federal lawsuit and their claims the Wisconsin city misled potential investors.

The North Shore Long Island Jewish Health System Inc. has agreed to pay $3 million to settle a civil fraud lawsuit in a deal the U.S. attorney’s office announced Tuesday.

WASHINGTON — The Securities and Exchange Commission will kick off its much-awaited series of hearings on the municipal market this month, holding the first on Tuesday, Sept. 21, in San Francisco.

Harrisburg’s debt woes are exacerbated by the political impasse between Mayor Linda Thompson and the City Council, which could hinder its ability to utilize the capital market in the future, according to a Moody’s Investors Service analysis of Pennsylvania’s capital city.

BRADENTON, Fla. — Alabama Circuit Court Judge Albert Johnson ruled Tuesday that he would appoint a receiver to take over Jefferson County’s sewer system, which is saddled with nearly $3.2 billion of variable- and auction-rate warrants.

Michigan Democratic gubernatorial candidate and Lansing Mayor Virg Bernero said last week that he would stop doing business with Wall Street banks that won’t participate in the state’s foreclosure program.

CHICAGO — A local dispute over a $150 million performing arts center prompted the Indiana attorney general last week to issue an opinion ruling that redevelopment commissions can issue some types of debt without the approval of a city’s legislative body.

BRADENTON, Fla. — The Fraternal Order of Police has filed a suit against Miami asking a judge to invoke a process that would essentially place the city’s finances under state control once again.

WASHINGTON — The Securities and Exchange Commission Thursday announced that it has adopted a temporary rule requiring municipal advisers to register with it by Oct. 1 to comply with the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act.

The California Redevelopment Association Monday submitted its opening brief for its appeal of a trial court decision upholding the state’s shift of more than $2 billion from local redevelopment agencies to help balance the budget.

Dauphin County Wednesday authorized TD Bank to pursue legal action against Harrisburg, as Pennsylvania’s capital city said it will not meet payments due Dec. 15 on $35 million of incinerator bonds.

ALAMEDA, Calif. — A bill to limit the ability of California local governments to file for bankruptcy expired Tuesday in the last-minute frenzy that marked the end of the regular 2010 session for the state’s stalemated Legislature.

WASHINGTON — Bowing to growing concerns from muni issuers, Moody’s Investors Service announced Wednesday that it will stop trying to get state and local issuers to agree to indemnify and hold it and its officers harmless for any mistakes they might make as a precondition to assigning ratings to municipal bond transactions.

WASHINGTON — More than 90% of municipal analysts surveyed believe they are more likely to hear about material events from the news than from issuers’ continuing disclosure notices, according to a new study.