Bankruptcy

WASHINGTON — Municipal market regulatory issues will not be studied for up to two years under changes to the base legislation Senate and House conferees are using to reconcile their competing legislative proposals to overhaul financial regulations.

A new law heading to Rhode Island Gov. Donald Carcieri’s desk for his signature is intended to bring the insolvent city of Central Falls out of receivership and under a new state oversight regime.

DALLAS — Louisiana Treasurer John N. Kennedy has urged Gov. Bobby Jindal to develop a financial contingency plan in case BP Corporation North America Inc. declares bankruptcy due to the enormous costs associated with its oil spill in the Gulf of Mexico.

Twelve states, including California, impose no restrictions on municipalities’ ability to file for Chapter 9 bankruptcy. On the other extreme, there are three states that do not allow local Chapter 9 filings and more than 20 that are silent on the matter, which is generally considered a prohibition.

CHICAGO — Former Illinois Gov. Rod Blagojevich and several associates expected to reap $500,000 from an $809,000 consultant’s fee paid by Bear, Stearns & Co. for its role as book-runner on the state’s $10 billion 2003 pension bond sale, an aide said in testimony this week during the disgraced ex-governor’s federal corruption trial.

HARRISBURG, Pa. - Pennsylvania Gov. Edward Rendell Wednesday night urged the Harrisburg city council to lease municipal assets to meet debt obligations rather than filing for bankruptcy or seeking state oversight under Act 47.

ATLANTA — Dealers are calling for the Municipal Securities Rulemaking Board to revise and clarify several aspects of draft interpretive guidance that outlines the steps they must take to ensure the prices they charge customers when buying and selling municipal securities are fair and reasonable.

ATLANTA — Municipal issuers are overreacting to recent developments surrounding the compliance program for Build America Bonds, a Treasury official said yesterday in an effort to tamp down ongoing concerns.

The Government Finance Officers Association approved policy statements Tuesday calling on the Governmental Accounting Standards Board not to move forward with its “fiscal sustainability” project and for the Securities and Exchange Commission to scrap plans to consider requiring floating net asset values for shares of money market funds.

The U.S. Supreme Court last week ruled in favor of Ohio Attorney General Richard Cordray last week when it said in a unanimous ruling that federal courts must defer to state courts on challenges to state law.

With the final selection of jury members expected to be completed yesterday, the stage was set for opening statements in the federal corruption trial of former Illinois Gov. Rod Blagojevich and his brother Rob.

ATLANTA — Government Finance Officers Association members are scheduled to vote this morning on a policy statement calling on the Securities and Exchange Commission to maintain a stable, $1.00 net asset value per share of money market funds and to scrap plans to consider a floating NAV.

ATLANTA — A Treasury Department official Monday said that federal regulators already have attempted to assuage muni market participants’ worries about how to determine issue price for Build America Bonds in guidance issued in April, even though issuers continue to air concerns about the lack of guidance.

WASHINGTON — With lawmakers from both chambers of Congress set to begin hammering out a single financial regulatory reform bill on Wednesday, one of the most contentious municipal-market issues to be worked out centers on who will regulate non-dealer financial advisers, swap advisers and other market intermediaries.

The Jefferson County Commission Tuesday agreed to hire a New York law firm to defend the county against a lawsuit filed by Syncora Guarantee Inc. on April 29.

Arbitration panels for the Financial Industry Regulatory Authority have ordered Citigroup to pay roughly $2.2 million to investors who lost money in one of the bank’s municipal bond arbitrage vehicles.

ALAMEDA, Calif. — A California Senate committee has approved a watered-down version of a bill designed to make it harder for cities or other local agencies to file for Chapter 9 municipal bankruptcy.

A state court on Wednesday allowed the Wisconsin insurance commissioner to proceed with his plan to allow bond insurer Ambac Assurance Corp. to imminently settle claims owed to major banks on structured finance product transactions.

Holders of Central Falls, R.I., debt will get paid — at least that’s the plan, according to the court-appointed temporary receiver who is now running things.

WASHINGTON — The Securities and Exchange Commission Wednesday unanimously approved amendments to its Rule 15c2-12 on disclosure that, like the ones proposed in July, will increase the quantity and timeliness of municipal issuers’ continuing disclosures.