Law and legal issues

The Detroit Water and Sewer Department plans to come to market in June with $150 million of sewer bonds — and possibly a restructuring of its entire $4 billion portfolio — in the midst of the city's tumultuous bankruptcy and talks to privatize the asset.

The counterparties to Detroit's interest-rate swaps mounted their first public defense of a controversial settlement with the city Friday, arguing that the derivatives are legally secured and warning that litigation would be costly and painful for Detroiters.

The bond insurers that wrap Detroit's unlimited-tax general obligation bonds have been ordered into a Monday mediation session with the city several weeks after the judge overseeing the case said he would issue a ruling on whether or not the city can treat the debt as unsecured.

The Louisiana State Bond Commission rejected a settlement with the Justice Department March 20 that would have resolved a federal housing discrimination suit.

Cincinnati's new mayor wants the federal court to organize all the city's retirees and employees into a single class and hammer out a consent agreement in court-ordered mediation in order to deal with the city's growing pension headache.

Rhode Island has hired Minnesota firm SJ Advisors to examine the impact of possibly defaulting on 38 Studios moral obligation bonds.

Detroit has reportedly yet to finalize a crucial settlement with its interest-rate swap counterparties.

Michigan Gov. Rick Snyder told local reporters that he wants Detroit to reach an agreement with its retirees to help advance legislation that would appropriate $350 million in state funds for the city's unfunded pensions.

Detroit's bankruptcy proceedings are on hyper speed compared to San Bernardino's Chapter 9 bankruptcy.

In a post-bankruptcy review, Moody's found that creditors received wide recovery rates in Jefferson County, Ala., and other recent municipal bankruptcies.

A pair of bond insurers filed lawsuits this week challenging key aspects of Detroit's bankruptcy debt plan, litigation that could derail the city's goal of exiting by the fall.

Syncora is challenging Detroit's latest attempt to settle with its interest-rate swap counterparties, a day after FGIC filed a challenge to the city's lawsuit attempting to invalidate its pension certificates.

Bond insurer Financial Guaranty Insurance Company has asked the bankruptcy court overseeing Detroit's Chapter 9 to allow it to intervene in a city lawsuit that attempts to repudiate $1.4 billion of pension certificate debt.

Six months after first announcing a deal, bankrupt Detroit is still struggling to secure a key debtor-in-possession loan with Barclays.

A judge denied a challenge filed by San Jose Mayor Chuck Reed and other supporters of the Pension Reform Act of 2014, causing them to delay placing the measure on California's November 2014 ballot.

Harrisburg, Pa., made a $4.7 million general obligation bond payment, its first such payment in three years.

Courtroom sparks continue to fly between California and former redevelopment agencies nearly two years after the state's highest court ruled in favor of dismantling the tax-increment financing program that had been created to fight blight.

Federal Judge Kimba Wood, who imposed $5.6 million in fines and restitution on municipal bond bid-rigger David Rubin, called prison unwarranted for the founder of CDR Financial Products.

A federal judge sentenced CDR Financial Products Inc. founder David Rubin to two years' probation and ordered him to pay a combined $5.65 million in fines and restitution for his role in rigging bids for municipal bond contracts.

Detroit's high-profile battle with its bondholders will likely have limited impact in the national market, as general obligation pledges vary widely across the country, Moody's Investors Service said in a new report.