Law and legal issues

Standard & Poor's revised the outlook on Los Angeles’s debt to stable from positive citing uncertainty from two lawsuits challenging the city's power revenue fund transfers.

Municipal professionals, insurers and bondholders criticized the United States Treasury’s proposal for a “Super Chapter 9” bankruptcy bill for Puerto Rico as dangerous.

Presidential candidate Sen. Bernie Sanders, I-Vt., has told Treasury Secretary Jack Lew that any debt in Puerto Rico that was issued in violation of the territory’s constitution “must be immediately set aside.”

Conventional wisdom that municipalities that file for bankruptcy “will never borrow in this town again” has not been found to be true, said panelists at The Bond Buyer’s California Public Finance Conference.

Allen Park, Mich., has delayed the settlement date for its purchase of $11.2 million of the $26.3 million of bonds offered to tender from a troubled issue for a failed movie studio project.

Resident Commissioner Pedro Pierluisi, D-P.R. and others testifying at a Senate committee hearing on Puerto Rico on Thursday said that it’s possible that some of territory’s debt may be unconstitutional and, if that is the case, it should not be paid.

The Treasury Department’s Antonio Weiss on Thursday will ask Congress to move swiftly to provide expanded Chapter 9 bankruptcy protection to Puerto Rico, as well as its authorities, and to provide other relief to the territory as it faces dire fiscal and liquidity crises.

Local credits in Michigan will be hurt if a proposal to give their unlimited tax general obligation bonds a statutory first lien falls through, Fitch Ratings said in a special report.

The Treasury Department's Antonio Weiss and Puerto Rico Gov. Alejandro Garcia Padilla will testify on Thursday before a Senate Committee on the territory's economy, debt and options that should be considered by Congress.

Pennsylvania Auditor Eugene DePasquale says the Harrisburg School District’s cafeteria is giving him heartburn, and it’s not about the food.

If enacted, Michigan's statutory lien bill will significantly improve recovery value if a municipality defaults, compared to other general creditors, including employees, Fitch Ratings says. However, it will not reduce the risk of default.

South Carolina’s Tuomey Healthcare System has negotiated a reduced settlement of $72.4 million with the Justice Department for filing 21,000 false Medicare claims.

Distribution of an $8.25 million legal settlement fund for investors in a failed Missouri sucralose plant is expected by the end of the year in a class action suit against underwriter Morgan Keegan and law firm Armstrong Teasdale.

The Florida Supreme Court affirmed the validation of $2 billion in clean energy bonds over challenges brought by banks and a former state legislator.

Puerto Rican civic, political, and business leaders from around the country met in Orlando Wednesday to rally for extending Chapter 9 bankruptcy to Puerto Rico public authorities but one speaker at the event urged caution in throwing support behind such a measure.

Buoyed by court victories challenging city and state pension reform legislation, labor is now taking aim at 2014 legislation that overhauled the Chicago Park District’s pension benefits and contributions.

Former Chicago Public Schools leader Barbara Byrd-Bennett entered a guilty plea Tuesday to one corruption count leveled against her by federal authorities for allegedly steering contracts to her former employer for promised kickbacks.

An attorney for Jefferson County, Ala., has asked an appellate court to consider the analysis of a federal judge who dismissed the final appeal in Detroit’s bankruptcy case.

The Securities and Exchange Commission’s Office of Municipal Securities is weighing whether to provide legal interpretive guidance to help municipal advisors determine if they are acting as an adviser or broker-dealer when working with an issuer on a bank loan.

Michigan lawmakers joined a national debate by advancing a bill to enact a statutory first lien on local issuers’ unlimited tax general obligation bonds.