Law and legal issues

Jefferson County's exit from Chapter 9 bankruptcy sparked interest in general obligation bondholder protections in Alabama, Moody's Investors Service said.

A coalition representing Detroit retirees sued in federal court to block the city from implementing health care changes that would shift older employees to Medicare and younger ones to the state-based health care exchange.

Detroit's negotiations this week with holders of the city's nearly $6 billion of water and sewer bonds went well enough that one investor said a settlement is likely.

Sen. Dominick Ruggerio's bill would ban use of retirement system funds to pay Rhode Island's legal cost as it defends the unions' court fight of pension changes.

Bell, Calif., which achieved national notoriety after corrupt leaders pilfered city coffers, has turned a financial corner with the aid of court settlements and a $15 million property sale.

A suit before the Florida Supreme Court seeks an order compelling Gov. Rick Scott to appoint a lieutenant governor. The position's been vacant for nearly 10 months.

The Michigan city of Benton Harbor, which is under emergency management, hopes to win a $2.3 million loan from the state to erase its deficit.

Three complaints have been filed challenging the constitutionality of the pension overhaul Illinois passed in December, and others are expected to follow ahead of the law's effective date in June.

Detroit emergency manager Kevyn Orr reversed a decision to close the bankrupt city's pension system for non-public safety employees and shifted it into a 401(k)-style defined contribution retirement plan.

The Missouri Supreme Court upheld a lower court decision dismissing the city of Moberly and its industrial development authority as defendants in a bondholder lawsuit targeting the underwriter of $39 million of city bonds issued for a failed artificial sweetener plant.

Bondholders who took ownership of the St. Louis convention center hotel complex four years ago hope to close next month on the sale of the complex's two hotels in separate transactions totaling about $29 million.

One of two appeals of Jefferson County, Ala.'s bankruptcy plan of adjustment will be dropped.

A hearing on Detroit's interest-rate swaps and proposed borrowing was pushed back until Tuesday due to a massive winter storm in the Midwest.

Detroit emergency manager Kevyn Orr said he asked the Securities and Exchange Commission to investigate the city's interest-rate swaps amid "serious questions" about the legality of the financings.

A Florida judge says Jacksonville violated the state's open meeting law when collective bargaining over pensions was done in private.

Bond insurer Ambac Assurance Corp. urged the federal judge overseeing the Detroit bankruptcy to reject the city's latest swap-termination deal, saying the terms are too rich in light of legal questions tied to the original financings.

Incoming mayor Eric Papenfuse, the face of Harrisburg, Pa.'s economic recovery, says he will will forgo an inaugural ball and get to work right after his inauguration.

As Detroit gears up to file its plan of adjustment this month in its historic bankruptcy case, the chief mediator in the case ordered the city Tuesday to meet with bondholders in a series of mediation sessions next week.

Jefferson County, Ala., is out of municipal bankruptcy but appeals of the bankruptcy plan and criminal prosecutions will keep the county in the spotlight.

The mediators overseeing Detroit's bankruptcy case recommended that the bankruptcy judge approve a settlement between the city and its interest-rate swap counterparties, calling it a significant step.