Law and legal issues

Scranton., Pa., risks default as it faces a $20 million budget gap and a further $28 million to settle a pension award with a Friday deadline to introduce its budget, according to Moody's.

The question of whether Detroit negotiated in good faith with its creditors, or even could, emerged as a central question in the nine-day trial over whether the city is eligible to enter Chapter 9 bankruptcy.

Stockton's vote to approve raising the sales tax is a credit positive for the city and for its bond insurers as it increases the likelihood that the bankruptcy exit plan will be approved, according to Moody's Investors Service.

Two bond insurers sued Detroit Friday for defaulting on its general obligation bonds, a challenge that goes to the heart of the city's unprecedented effort to treat its unlimited-tax GO debt as unsecured.

Attorneys will present closing arguments Friday in Detroit's court battle to enter Chapter 9 bankruptcy, capping an eight-day trial that centered on whether the city has negotiated in good faith with creditors.

The SEC's enforcement action against participants in the Regional Events Center Public Facilities District's arena deal shows that the commission will not shy from seeking financial penalties against municipal issuers and transaction participants, market participants said.

Jefferson County, Ala.'s bankruptcy plan will eliminate dozens of suits, restructure debt, and offer the sewer system "a fresh start," court documents said.

Bankrupt San Bernardino's city attorney, Jim Penman, was recalled by voters, and so was Councilwoman Wendy McCammack who still qualified for a runoff in the mayor's race.

The bankrupt city of Stockton, Calif., is planning to sell $55 million of water revenue bonds next week to convert its outstanding variable rate bonds to fixed-rate.

Bond insurer Syncora Guarantee Inc. filed an objection to Detroit's effort to repair its broken down streetlight system with the use of the city's utility tax to back bond payments.

Detroit late Tuesday asked the federal judge overseeing its bankruptcy case to approve a controversial $350 million debtor-in-possession financing.

Bankrupt Jefferson County, Ala., began marketing efforts in earnest in advance of selling $1.74 billion of sewer system refunding warrants to finance its exit from Chapter 9.

Stockton residents voted to approve a sales tax increase that will help the city fund its plan to exit Chapter 9 bankruptcy.

Former Michigan Treasurer Andy Dillon said Tuesday that he became convinced bankruptcy was inevitable for Detroit when he saw the city’s proposal for unsecured creditors.

If approved, Stockton’s plan to exit bankruptcy identifies negotiation strategies, legal ambiguities, and potential consequences for future municipal bankruptcies, according to Fitch Ratings.

Former JPMorgan bankers argue that bankrupt Jefferson County, Ala.'s swap transactions are outside the Securities and Exchange Commission’s purview.

Former Michigan Treasurer Andy Dillon may be called to testify Tuesday as the battle over Detroit's eligibility to enter into bankruptcy enters its seventh day.

A North Carolina judge has bounced the governance dispute over Charlotte Douglas International Airport back to the Federal Aviation Administration.

The California Public Employees' Retirement System lost its appeal of San Bernardino's bankruptcy, and filed an amicus brief in a separate case about the city's former redevelopment successor agency.

Florida Attorney General Pam Bondi settled foreign currency transaction charges and securities lending issues with Bank of New York Mellon for $28 million.