Law and legal issues

The U. S. House Judiciary Committee will hold hearings in the next few weeks to consider making Puerto Rico's public corporations and municipalities eligible for Chapter 9 bankruptcy.

The January default by a well-off Indiana school district, though quickly cured, reveals problems with the state funding formula and investors' reliance on state school enhancement programs, market participants say.

U.S. Bankruptcy Court Judge Steven Rhodes, who oversaw Detroit's historic Chapter 9 bankruptcy, will retire Feb. 18, the court announced Friday.

Ascension Health's sale of two Kansas City, Missouri area hospitals to a for-profit was cleared after Ascension agreed to set aside $20 million in sale proceeds to fund acute indigent medical care, Missouri Attorney General Chris Koster said.

Detroit will float $119 million of water and sewer bonds through the state's revolving fund under a resolution approved Thursday by the financial commission that oversees the post-bankrupt city.

U.S. Bankruptcy Judge Steven Rhodes has approved $183 million of fees charged by professionals during the city's bankruptcy, in a ruling that heaps praise on the attorneys and consultants who worked on the city's behalf.

An appellate court ruling could mean increased financial pressure for cities that transfer revenue from electric utilities to general operating funds, Fitch Ratings warned in a report.

The Missouri Senate will vote Thursday on legislation tightening limits on how much local governments can rely on court-related fines to prop up their operating budgets.

Opponents of California's High Speed Rail project filed an appeal Monday challenging a ruling that favored federal jurisdiction over California environmental regulations on a segment of the line from Fresno to Bakersfield.

Bond insurers Assured Guaranty and MBIA may be among the beneficiaries after a federal judge ruled Puerto Rico's Recovery Act was unconstitutional, according to analysts at BTIG LLC.

Owners of the bankrupt Indiana Toll Road assured a federal bankruptcy judge recently that they expect to find a new owner for the 75-year lease within a few months and that the asset could fetch as much as $5 billion.

A federal court rejection of Puerto Rico's public corporation bankruptcy law has heightened uncertainty about the future of Puerto Rico debt.

Nebraska legislators will hold a public hearing March 3 on a bill that would give bondholders priority over retirees in the event of a bankruptcy.

A day after Wayne County officials warned of a grim financial picture, Moody's Investors Service stripped the county of its investment-grade rating and Fitch Ratings put its already junk-bond ratings on negative watch.

Fitch Ratings, which already maintains junk ratings on Wayne County, Mich., put the ratings on a negative watch just hours after the release of a new audit that warns the county could be out of cash by next summer.

Having sold its incinerator, Harrisburg, Pa., has a new symbol of a deal gone sour: a 12-story downtown office building, subject of a $6.9 million borrowing in 1998 that straddled the city with $42 million in debt service the city recently restructured.

Connecticut will receive $36 million of a $1.4 billion multistate settlement with Standard & Poor's over allegations that S&P misled investors, state officials announced.

The newly elected head of Wayne County Michigan, home to Detroit, warned Thursday that the county is on track to run out of cash by August 2016, calling it “financial Armageddon.”

In a formal written opinion, U.S. Bankruptcy Judge Christopher Klein reiterated that bankruptcy law gave Stockton, Calif. the legal authority to impair pensions, even though the city chose not to.

The Republican parties of New York State and Tennessee will square off against the Securities and Exchange Commission in oral arguments in a federal court March 23 over rules restricting finance professionals from giving money to political candidates.