Law and legal issues

Jury selection began Tuesday in a federal class action lawsuit accusing the former Morgan Keegan & Co. Inc. of securities fraud for its role in underwriting $39 million of defaulted bonds for a failed artificial sweetener plant in Moberly, Mo.

Municipal bond defaults, which increased to record levels last year as Detroit's bankruptcy boosted the total, may remain elevated this year.

A union opposed to the sale of nonprofit California hospital system Daughters of Charity to a for-profit operator has filed a National Labor Relations Board complaint as it fights to derail the transaction.

The Securities and Exchange Commission is urging a federal court to accept the settlements it had reached with two former officials of the city of Allen Park, Mich., in November, after the court vacated them a day later and asked for more information.

The recent dismissal of a three-year old lawsuit against Burlington, Vt. related to its city-owned broadband provider Burlington Telecom is a credit positive for Vermont's largest city, according to Moody's Investors Service.

While entangled in a federal lawsuit over disclosure issues, Miami rolled out a new transparency initiative to make financial data publicly available.

San Bernardino's pension bondholders have filed a lawsuit in the California city's bankruptcy case seeking equal treatment with the state's largest pension fund.

The engineers of the plan Long Island's Suffolk County Off-Track Betting Corp. used to exit Chapter 9 with a 100% return to creditors say it could be a model for other municipal reorganizations.

Michigan Democrat Rep. John Conyers has introduced legislation that would make it much harder for municipalities to restructure their debt through bankruptcy.

California's nonprofit Daughters of Charity Health System is bucking noisy union opposition in an effort to sell out to a for-profit operator that would retire its junk-rated tax-exempt bonds.

Lombard, Ill.'s refusal to cover a debt service shortfall on $190 million of bonds issued for a struggling hotel and conference center has triggered a new payment default.

Work is officially under way on California's $68 billion high speed passenger rail project funded with $10 billion of voter-approved state bonds

Boston is suing the Massachusetts Gaming Commission over its award of a license to Wynn Resorts for a gaming resort in nearby Everett.

The sewer system ratepayers seeking to overturn Jefferson County's bankruptcy plan objected to briefs submitted to the 11th Circuit Court of Appeal by the National Association of Bond Lawyers and Securities Industry and Financial Markets Association .

Chicago faces a second lawsuit challenging the constitutionality of reforms adopted last year that overhauled two of its four pension funds.

Thirty-six Republican Arizona legislators should be allowed to challenge the constitutionality of a measure to expand Medicaid eligibility even though it won legislative approval, the state Supreme Court ruled.

Already struggling to erase a $715 million deficit over the current and coming fiscal years, Kansas lawmakers face a costly court ruling that could require them to add more than $500 million to school funding.

In a written ruling outlining his verbal affirmation of Detroit's bankruptcy exit plan, the federal bankruptcy judge overseeing the case warned that if Michigan does not act to assure that cities can pay their pensions, it may mean a repeat of the high-profile bankruptcy.

A lawsuit challenging the Securities and Exchange Commission's investment adviser pay-to-play rule is moving forward in a D.C. federal appeals court, with implications for muni market pay-to-play restrictions hanging in the balance.

Gov.-elect Tom Wolf talked up school funding during his campaign, but finding a solution may be difficult.