Law and legal issues

In an audit of Stockton's finances, California Controller John Chiang says city officials should have seen the warning signs of trouble that sent Stockton into bankruptcy.

The San Bernardino Public Employees Association could withdraw its opposition to the city's eligibility to be in bankruptcy if the two parties reach an agreement on the union's contract.

Objections to Jefferson County, Ala.'s Chapter 9 bankruptcy disclosure statement will be heard by a federal court Tuesday as the county opposes $2.6 billion in claims for payments made by one objector.

Detroit expects to file a final plan of adjustment by the end of the year, months ahead of a proposed March deadline, attorneys for the city told the federal judge overseeing the bankruptcy case.

Harrisburg, Pa., receiver William Lynch denies that Detroit's bankruptcy filing had anything to do with creditors in Pennsylvania's capital moving toward a consensus.

The federal judge overseeing Detroit's bankruptcy case may weigh in this morning on the city's one and only creditor settlement, which terminates a series of interest-rate swaps hedging its pension certificates.

Moody's Investors Service Thursday downgraded Wayne County, Mich., which includes Detroit, to Baa3, the lowest investment-grade rating.

A new analysis from Morningstar weighs in on the debate over the size of Detroit's pension liability, suggesting that current pension fund assumptions fall mostly within accepted industry standards.

Preliminary results show a majority of bankrupt American Airlines' shareholders and creditors — which include some holders of the airline's $3.3 billion of municipal bonds — have signed off on a proposed reorganization.

The U.S. Bankruptcy Judge in the San Bernardino Chapter 9 case will appoint Gregg Zive, U.S. Bankruptcy Judge for the Reno, Nev., district, as mediator.

Charlotte is in court again fighting passage of a second bill by the North Carolina General Assembly transferring Charlotte Douglas airport's operations to a 13-member commission.

Any credit with Detroit in its name can expect to take a hit in the market, but for the Detroit Metropolitan Airport, the so-called Michigan penalty is nothing new, says CFO Terry Teifer.

Jefferson County, Ala., has proposed an aggressive timeline for exiting bankruptcy but objections have been lodged before the judge can even confirm the schedule.

Illinois' House Speaker and Senate President filed a lawsuit against Gov. Pat Quinn Tuesday challenging his move to stop paying lawmakers in an attempt to pressure lawmakers to pass pension reforms.

The federal bankruptcy judge overseeing Detroit filed Tuesday an eight-month schedule of key hearings ahead of a March deadline for the city to file its final plan of adjustment.

The Indiana Attorney General last week said he would not investigate the controversial $4.5 billion bond-financed Prairie State Energy Campus located in southern Illinois.

Two leaders called for New York's state government to take steps to prevent local governments from ending up in bankruptcy.

Jefferson County, Ala., said that the IRS completed an examination of the county's 2006 lease revenue warrants with no change in tax exempt status.

A judge last week ordered Cook County, Ill. to stop collecting a new tax that the county began to levy last year to help offset a 2013 budget deficit.

Michigan Attorney General Bill Schuette said he will join Detroit's bankruptcy in his role as "the people's attorney" to defend retirees' pensions.