Bankruptcy

The Municipal Securities Rulemaking Board has filed a proposed rule change with the Securities and Exchange Commission that on July 1 would terminate its CDINet system, which accepted and disseminated issuers' material-event notices.

BRADENTON, Fla. — Alabama Gov. Bob Riley asked lawmakers in Washington to consider legislation that would provide debt guarantees for a refinancing that would help Jefferson County avoid a “massive default” on $3.2 billion of sewer debt, an event he warned would reverberate through the municipal bond market.

Since Alabama lawmakers refused to assist Jefferson County by approving a bill that would have helped the county restructure $3.2 billion of troubled sewer debt, a new hearing has been scheduled in the quest by the county’s bond trustee and insurers to have a receiver appointed for the sewer system.

WASHINGTON - As part of the transition to its EMMA system, the Municipal Securities Rulemaking Board yesterday discontinued an electronic submission system known as e-OS, which was used for dealers to submit official statements and advance refunding documents under Rule G-36 on official statements.

DALLAS - Attorneys for Wells Fargo Bank and other creditors are asking a federal court in Amarillo, Tex., to force bankruptcy on the American Housing Foundation, which has acquired low-income apartment complexes in several states with the proceeds of tax-exempt bonds and federal tax-credit financing.

WASHINGTON - South Carolina Gov. Mark Sanford moved from the state Supreme Court to a federal district court a case revolving around the legality of a federal stimulus law provision permitting state legislatures to draw down federal funds for job creation and economic growth if their governors refuse to do so.

President Obama's nominee for the U.S. Supreme Court, Judge Sonia Sotomayor, made her mark on the municipal bond market when she presided over a case in 1995 involving kickbacks for a New Jersey muni bond deal.

Two tax lawyers who work in the municipal bond market have been tapped to serve two-year terms on the tax-exempt bond team of the Internal Revenue Service's Advisory Committee on Tax-Exempt and Government Entities, which is scheduled to meet here on June 10.

The group of hedge funds that sued MBIA Inc. and its insurance subsidiaries over their restructuring continued to make their caselast week, arguing that its allegations of a fraudulent conveyance should not be dismissed.

WASHINGTON - The Securities and Exchange Commission on Friday approved June 1 start dates for two Municipal Securities Rulemaking Board systems that form key parts of the board's EMMA central disclosure repository.

Sen. Kay Bailey Hutchison has introduced a bill that would prohibit states, private parties and others from adding tolls on existing toll-free federal highways, bridges and tunnels built with federal funding.

The Financial Accounting Foundation has named David Sundstrom, auditor-controller for Orange County, Calif., to the Governmental Accounting Standards Board, which is overseen by the FAF.

HALF MOON BAY, CALIF. - Half Moon Bay isn't declaring bankruptcy. Full stop. End of story.

WASHINGTON - The Obama administration is close to unveiling a three-pronged program to help state and local housing finance agencies, including a liquidity facility to support state HFA-issued variable rate demand obligations, a senior Department of Housing and Urban Development official will tell lawmakers this morning.

BRADENTON, Fla. - Alabama lawmakers went home last Friday without providing financial relief for Jefferson County commissioners struggling to restructure $3.2 billion of troubled sewer debt. Lawmakers also failed to reauthorize an occupational tax that supports more than one third of the county's general fund budget.

A Denver-based consulting firm is floating a plan to create a mutual bond insurance company, a modified version of a plan created by the National League of Cities that would be in lieu of the federal reinsurance program proposed by House Financial Services Committee members.

The Financial Industry Regulatory Authority has filed a complaint against Chicago-based Jordan P. Zaro, the owner and chief executive of Riverside Securities Inc., for swindling money from a 63-year old widow and creating false account statements showing fake municipal bond purchases to cover up the scheme.

WASHINGTON - The Municipal Securities Rulemaking Board announced yesterday that it has reached a memorandum of understanding with CUSIP Global Services over the use of Cusips on its EMMA system and is now seeking to proceed with the launch of two long-awaited components of the central repository.

The chairman of a House Financial Services Committee panel yesterday suggested Congress ought to consider legislation making it easier for investors to sue credit rating agencies for "grossly inaccurate" ratings, as lawmakers sharply criticized the agencies for their failure to accurately rate structured finance products and other securities.

CHICAGO - Illinois Gov. Pat Quinn yesterday outlined a grim picture that would result from deep spending cuts under a "doomsday" budget scenario if lawmakers don't approve his proposed $52.9 billion operating budget that relies on an unpopular income tax increase to help wipe out a $12 billion deficit.