Bankruptcy

WASHINGTON - Market participants made passionate, if opposite, arguments last week in response to Securities and Exchange Commission chairman Christopher Cox's remarks that he will renew his push to urge Congress to boost municipal disclosure and accounting standards, with issuers taking a strong stand against Cox and analysts supporting him.

VALLEJO, Calif. - Vallejo and its public employee unions say they're willing to negotiate a settlement to end the city's three-and-a-half-month old Chapter 9 bankruptcy case.

Fitch Ratings downgraded the Aromas-San Juan Unified School District’s general obligation bonds to BB-plus from BBB-minus.

WASHINGTON - The Municipal Securities Rulemaking Board issued a reminder to broker-dealers yesterday about the application of its Rule G-37 on political contributions to the federal election campaigns of issuer officials, two weeks after presidential hopeful Arizona Sen. John McCain tapped Alaska Gov. Sarah Palin as his vice presidential running mate.

BRADENTON, Fla. - Officials representing Jefferson County, Ala., resumed negotiations with creditors yesterday, as a Birmingham councilor suggested the city buy the county's troubled sewer system and public finance professionals met to discuss the implications should the county file for bankruptcy protection.

The Securities Industry and Financial Markets Association has told a federal court in Alabama that the Securities and Exchange Commission made irrelevant and baseless arguments in urging the court to disregard its friend-of-the-court brief in a case involving Jefferson County interest rate swaps.

BRADENTON, Fla. - The Jefferson County, Ala., Commission yesterday unanimously approved new forbearance agreements delaying swap and debt payments to creditors, while trying to negotiate an agreement to restructure the county's $3.2 billion of sewer debt, which is mostly in troubled auction- and variable-rate securities.

WASHINGTON - The Securities and Exchange Commission plans to propose as early as the end of the month rules that would enhance municipal disclosure, SEC chairman Christopher Cox said in an interview Friday.

SACRAMENTO - A U.S. federal court ruled late Friday that Vallejo, Calif., is bankrupt, ending a battle over its solvency and forcing the city and its creditors to begin negotiating a plan to adjust the city's debts.

BRADENTON, Fla. - As Jefferson County's creditors consider a $3.2 billion sewer debt restructuring plan offered by Alabama Gov. Bob Riley, county commissioners today are expected to extend forbearance agreements that delay swap and debt payments.

BRADENTON, Fla. - Two Birmingham, Ala., residents and a nonprofit group have filed a lawsuit asking that a judge invalidate $2.2 billion of sewer auction-rate securities issued by Jefferson County and $4.2 billion of related swaps, saying the transactions were tainted by corruption.

Pennsylvania's Erie School District last week filed a lawsuit in U.S. federal court against JPMorgan, one of the bank's former brokers, and Investment Management Advisory Group Inc., alleging that collusion by the defendants cost the district more than $1 million on an interest-rate swap transaction.

Vallejo, which filed for Chapter 9 bankruptcy protection in May, filed a list of its 20 largest unsecured retiree health-care benefit claims this week.

WASHINGTON - More than a year after Securities and Exchange Commission chairman Christopher Cox proposed a series of initiatives to boost municipal disclosure and accounting standards, no one in Congress or the municipal market appears to be interested in championing them.

CHICAGO - The imminent departure of Mayor Kwame Kilpatrick may signal the end of the legal and political saga that has consumed Detroit for nearly nine months, but the city's fiscal woes are far from over.

SAN FRANCISCO — A U.S. bankruptcy court has ruled that Vallejo, Calif., is insolvent.

CHICAGO - Investors holding $38 million of bonds issued on behalf of a Michigan hospital will likely end up receiving just $3.2 million under a deal announced last week allowing the cash-strapped facility to enter bankruptcy before being purchased by a for-profit group of physicians.

BRADENTON, Fla. - A proposed restructuring plan reportedly being offered by Alabama Gov. Bob Riley to Jefferson County's sewer system creditors would require bondholders to accept a lower interest rate, banks to buy back some or all of the county's auction-rate securities, and swap counterparties to seek reimbursement for termination payments from bond insurers.

CHICAGO - Detroit Mayor Kwame Kilpatrick was expected to plead guilty to felony charges this morning as part of a deal that likely will result in the once-popular young mayor resigning from office and possibly serving jail time.

WASHINGTON - More than half the municipal bonds sold between 1996 and 2005 have been delinquent in filing financial disclosures, showing the secondary market disclosure system for the municipal market is flawed, mostly because there are "no consequences for not filing," Peter J. Schmitt, president of DPC Data Inc., said yesterday about a new study released by his firm.