Bankruptcy

BRADENTON, Fla. - Jefferson County commissioners yesterday said Alabama Gov. Bob Riley and the law firm Bradley, Arant, Rose & White LLP would step in and take over negotiations with creditors in a last-ditch effort to restructure the county's $3.2 billion of troubled sewer debt and avoid a bankruptcy filing.

CHICAGO - Five southeastern Wisconsin school districts are weighing litigation against financial firms they believe misrepresented the safety of a complex investment transaction that involved collateralized debt obligations and a credit default swap to help fund a portion of their other post-employment benefit liabilities.

WASHINGTON - Nonprofit student loan lenders in Kentucky and New Mexico have each privately placed $50 million of short-term debt with their respective states as part of efforts to find short-term liquidity that will allow them to participate in a program run by the Department of Education to assist non-bank lenders in financing student loans.

WASHINGTON - Merrill Lynch & Co. on Friday agreed to a preliminary settlement-in-principle over auction-rate securities with the Securities and Exchange Commission that would enable investors who purchased ARS from the firm to receive a total of up to $7 billion to restore their losses and liquidity.

BRADENTON, Fla. -Alabama Gov. Bob Riley began meeting in person with Jefferson County commissioners last week, urging them to find a solution they can unite behind to resolve the county's $3.2 billion sewer debt crisis that has been the focus of negotiations with creditors for nearly seven months.

SACRAMENTO - Vallejo, Calif., has made its case for filing Chapter 9 bankruptcy, and U.S. District Bankruptcy Court Chief Judge Michael McManus wants to hear more.

WASHINGTON - Merrill Lynch & Co., Goldman, Sachs & Co., and Deutsche Bank AG will buy back at par as much as $14.5 billion of auction-rate securities and pay $162.5 million of fines under separate agreements in principle reached with New York Attorney General Andrew Cuomo and the North American Securities Administrators Association.

WASHINGTON - Fidelity Investments and Charles Schwab & Co. are suggesting state and federal securities regulators focus their auction-rate securities investigations on the major banks and broker-dealers that underwrote ARS rather than smaller brokerages that had no advance knowledge that the ARS market was going to collapse.

WASHINGTON - Erik Kimball, formerly a shareholder with Akerman Senterfitt in Orlando, in June joined U.S. Bankruptcy Court for the Southern District of Florida for a 14-year term as a judge in the West Palm Beach division.

DALLAS - A third El Paso Independent School District trustee implicated in a wide-ranging federal corruption investigation has abruptly resigned.

WASHINGTON - The Regional Bond Dealers Association is pushing state and federal regulators to force the major banks and broker-dealers that underwrote auction-rate securities to provide relief to all investors who purchased ARS, not just the investors that were their customers.

SAN FRANCISCO - A long-running lawsuit filed by a spurned oil-drilling company has the potential to force a Southern California beach city into bankruptcy or take on debt to settle the case, though Hermosa Beach officials hope state lawmakers will pass a bill that could eliminate much of their liability.

WASHINGTON - Ronald Stack, managing director and head of public finance at Lehman Brothers, has been elected chairman of the Municipal Securities Rulemaking Board for a one-year term beginning Oct. 1, the board announced today.

BRADENTON, Fla. - Alabama's pension chief advised Jefferson County commissioners Friday to authorize their attorney to prepare to file for Chapter 9 municipal bankruptcy and use the threat of an actual filing to force the county's creditors into "serious negotiations" to resolve a sewer-debt crisis on terms more favorable for taxpayers.

BRADENTON, Fla. - Jefferson County, Ala., commissioners yesterday voted 3 to 2 to ask local voters Nov. 4 how they want the county to solve its $3.2 billion sewer debt crisis, including whether or not the county should seek municipal bankruptcy protection from creditors.

WASHINGTON - In the first legal action of its kind, New Hampshire's top securities regulator has filed administrative proceedings against UBS Securities LLC for unethically misrepresenting auction-rate securities it underwrote and remarketed for the state's nonprofit student loan lender.

Widespread conversions from auction-rate securities to variable-rate demand obligations featuring liquidity facilities may result in activities that violate federal laws against bank tying as well as prohibitions against the underpricing of credit products, the Municipal Securities Rulemaking Board said in a notice to broker-dealers yesterday.

WASHINGTON - JPMorgan Chase & Co. and Morgan Stanley yesterday became the latest firms to reach auction-rate securities settlements with New York State Attorney General Andrew Cuomo and other states, agreeing yesterday to buy back at par a total of $7.5 billion of the illiquid securities from retail investors and pay fines of $60 million.

WASHINGTON - The Nebraska public power executives and municipal power pool who were enjoined from managing a $529 million bond-funded power project and ordered to pay more than $3 million in damages to a competing agency have submitted motions for a new trial, arguing they were not treated fairly in the first one.

WASHINGTON - The Securities and Exchange Commission enforcement staff has notified Wachovia Bank NA that they may recommend the SEC file charges against it as a result of an investigation of alleged anti-competitive bidding practices in municipal derivatives and investment products.