Bankruptcy

Delayed progress of the federal government's market bailout continues to restrict state and local governments' abilities to raise money, Massachusetts Treasurer Timothy Cahill said yesterday.

A lawsuit filed by New Orleans alleging that "mismanagement" and "greed" at Ambac Assurance Corp. cost the city millions of dollars is nothing more than "a lot of sound and fury," the insurer said in a motion seeking dismissal of the case earlier this week.

BRADENTON, Fla. - Jefferson County commissioners yesterday voted 3 to 2 to approve a seven-day extension of its forbearance agreements with banks and swap counterparties at the request of Alabama Gov. Bob Riley.

WASHINGTON - Morgan Stanley announced Monday it will refinance illiquid auction-rate preferred shares with tender options bonds, created from municipal securities in 10 of its closed-end municipal funds, to escape high interest rates and provide liquidity to its auction-rate securities investors.

CHICAGO - Five southeastern Wisconsin school districts this week filed a lawsuit against Stifel Nicolaus & Co. and the Royal Bank of Canada, alleging that the firms fraudulently misrepresented the safety of an investment transaction involving synthetic collateralized debt obligations, resulting in about $150 million in losses.

Stephen R. Moynahan has been barred from acting as a supervisor at a broker-dealer firm, suspended from the dealer community for six months, and ordered to pay $140,000 under a settlement of Securities and Exchange Commission charges that he failed to supervise Robert J. Bradbury, the former head of Dolphin & Bradbury Inc., who allegedly defrauded Pennsylvania school districts.

BRADENTON, Fla. - As Jefferson County, Ala., commissioners meet today to consider a seven-day extension of their sewer and general obligation forbearance agreements, officials face a protracted and expensive legal battle in federal court as creditors seek proposals from potential receivers to run the financially troubled system, according to a legal expert.

Ronald A. Stack, managing director and head of finance at Barclays Capital in New York, became chairman of the Municipal Securities Rulemaking Board yesterday, less than two weeks after his former firm, Lehman Brothers Inc., filed for bankruptcy protection.

WASHINGTON - Lawmakers are considering extending the Treasury Department's federal guaranty program for money market mutual funds, suspending fair value accounting, and raising the deposit insurance limit at banks, in an effort to convince at least 12 members to change their votes on legislation designed to calm the financial markets.

BRADENTON, Fla. - Tax increment financing in Florida is back in limbo again.

The primary municipal bond market may have ground to a virtual halt, but yesterday marked the startup of the New Issue Information Dissemination System, which is designed to improve the accuracy and timeliness of information about new municipal securities issues that is disseminated to market participants.

BRADENTON, Fla. - As Jefferson County, Ala., was poised to default on its debt payments yesterday, a federal judge set a hearing for Friday in the lawsuit seeking to have a receiver appointed for the county's financially troubled sewer system.

WASHINGTON - The House yesterday rejected the Bush administration's $700 billion bailout package by a vote 228 to 205, stunning proponents of the measure and triggering huge losses in the markets after the Treasury earlier in the day detailed and opened its $50 billion temporary federal guaranty program for money market funds.

BRADENTON, Fla. - Jefferson County, Ala., faces expiration of its latest forbearance agreements today and may default on some of its $3.2 billion of troubled sewer debt, most of which is in variable- and auction-rate securities.

WASHINGTON - Raymond James Financial Inc. confirmed Thursday that it will apply for bank holding company status, following the course taken last week by the larger investment banks, Goldman Sachs Group Inc. and Morgan Stanley.

U.S. District Judge R. David Proctor today holds a second conference call with attorneys for Jefferson County, Ala., and the bond insurers and trustee who are seeking immediate appointment of a receiver for its troubled sewer system.

WASHINGTON - Could tax-exempt housing bonds help resolve the financial crisis?

The primary market will again be severely diminished this week as several new issues remain in limbo against a backdrop of continued weakness in municipals and intense anxiety in the overall financial markets as a result of last week's government takeover of Washington Mutual and the pending resolution by Congress of the $700 million financial industry rescue plan.

SAN FRANCISCO - The consolidation and reshaping of the U.S. financial industry landscape continued late last week, as JPMorgan Chase & Co. snapped up the assets of defunct Washington Mutual Inc.

Roosevelt & Cross Inc. did not fulfill a commitment to purchase $159.7 million of revenue anticipation notes and bond anticipation notes after it was unable to underwrite them last week, according to Kenneth Vetter, executive director for the issuer that tried to sell the debt, the Erie County, N.Y., Fiscal Stability Authority.