Law and legal issues

Detroit alerted the federal bankruptcy court Wednesday of plans to issue a subpoena to the Bond Buyer for information about the city's controversial $1.4 billion pension certificates of participation sale, and a bond insurer subpoenaed a trio of public finance professionals for depositions in their case.

The New Jersey Education Association will sue New Jersey Gov. Chris Christie on his underfunding of the pension system in the fiscal year 2015 budget, a NJEA spokesman said Tuesday.

Syncora Guarantee Inc. is challenging bankrupt Detroit's April settlement with its unlimited-tax general obligation bondholders, saying it violates Michigan law.

Detroit's two interest-rate swap counterparties returned to court to complain that the city's plan of confirmation does not conform to the terms of the settlement they reached with the city.

Moses Afonso Ryan agreed to pay $4.37 million to settle with Rhode Island over the state's lawsuit for its role as a 38 Studios bond deal advisor.

James Diossa, 29, is the new face of Central Falls as the 19,000-population Rhode Island city recovers from bankruptcy.

The chief mediation in Detroit's Chapter 9 case has ordered the city to meet Monday with holders and insurers of $1.4 billion of certificates of participation to try to reach a settlement.

Bankruptcy Judge Steven Rhodes blocked insurer Syncora's request to question the state attorney general, and gave a limited green light to plan for the city's proposal to take the court on a bus tour of the city as part of the upcoming trial.

An Arizona judge has struck down a state car-rental tax that supports $1.2 billion of debt issued for professionals sports stadiums in the state.

Investors were not reluctant to buy the Detroit name when the Michigan Finance Authority priced $185 million of bonds for the Detroit Public Lighting Authority Wednesday.

As Detroit has shown, the Chapter 9 world and the municipal bond finance world often just don't speak the same language, according to Nixon Peabody LLP attorneys.

Harvey, Ill. and its comptroller, Joseph T. Letke, are accused of misusing bond proceeds and misrepresenting investment risks in a civil complaint filed by the Securities and Exchange Commission that led to an injunction blocking an upcoming issue planned by the Chicago suburb.

Moody's downgraded the ratings of King's Daughters Medical Center, Ky., to A3 from A2, with a continued negative outlook, partly because of a $41 million Department of Justice settlement.

New laws in Tennessee laws prohibit state aid to fiscally distressed local governments and tighten requirements for local governments that use balloon or backloaded debt.

The West Independent School District is suing its insurance provider, claiming that the company is refusing to cover the full cost of damage from a 2013 fertilizer plant explosion that killed 15 people.

San Bernardino, Calif., leaders failed to pass a budget at Monday night's council meeting, postponing a vote to June 30 – the last day of the fiscal year.

Detroit Tuesday defended its proposal to take Bankruptcy Judge Steven Rhodes on a bus tour of the city as part of the plan of confirmation trial later this summer.

Syncora Guarantee Inc. has accused Detroit of pitting its pensioners against its financial creditors in a "torches and pitchforks" campaign, the insurer's latest salvo in a rising war of words between the two parties.

San Bernardino's firefighters union has replaced the California Public Employees' Retirement system as the most adversarial creditor in the city's Chapter 9 bankruptcy.

Bond insurer Financial Guaranty Insurance Co. has subpoenaed Michigan Gov. Rick Snyder and Sean Werdlow, with Siebert Brandford Shank and a former Detroit CFO, for a deposition in the Detroit bankruptcy.