Law and legal issues

Officials overseeing Jefferson County, Ala.'s municipal bankruptcy say they understand the challenges and stigma that Detroit now faces.

As Detroit filed for bankruptcy, formerly bankrupt Central Falls, R.I. received an upgrade from Moody's Investors Service to B1 from B2.

Detroit emergency manager Kevyn Orr said Friday he expects an eligibility fight over the city's petition to file for Chapter 9 bankruptcy protection, but that his plan to pay creditors between 10 cents and 20 cents on the dollar should make for a speedy process.

Moody's upgraded the rating of former bankrupt city Central Falls, R.I., to B1 from B2, affecting $13.7 million in outstanding general obligation bonds.

Detroit filed a flurry of court papers late Thursday in support of its historic Chapter 9 request, including an outline of creditor negotiations that says the lack of representation and organization among creditors, including bondholders, made it impossible to reach settlements.

Detroit's bankruptcy filing on Thursday was not unexpected, but market participants say its impact is hard to gauge and that it has negative implications for the market.

Detroit filed for Chapter 9 bankruptcy Thursday, a historic move that marks the largest municipal bankruptcy filing to date. It's also a first for Michigan, and the first time a state's largest city has filed.

A Florida community development district's lawyer is urging the Internal Revenue Service's chief counsel to reconsider a ruling against the CDD, arguing it is incorrect, biased, lacks legal analysis and ignores precedent.

The trustee for Rhode Island's Central Falls Detention Facility Corp. has again tapped into the reserve fund related to Wyatt Center bonds.

Detroit's two retirement systems sued Michigan Gov. Rick Snyder and Detroit emergency manager Kevyn Orr, saying Detroit's "imminent" Chapter 9 bankruptcy would violate state constitutional protections.

Fitch Ratings said Tuesday it's continuing to monitor the $5.9 billion of Detroit water and sewer bonds, but noted that the debt enjoys strong legal protections in or outside of a Chapter 9 filing.

U.S. Bank filed papers Tuesday disputing Syncora Guarantee Inc.'s account of the bank's role in a court battle between the bond insurer and Detroit over the use of casino revenues.

In the sea of junk-rated Detroit debt trading for 30 to 40 cents on the dollar, the piece of the city's defaulted pension certificates that feature Berkshire Hathaway Assurance Corp. continue to see retail bids of nearly 90 cents on the dollar.

Detroit emergency manager Kevyn Orr has reportedly reached an agreement with counterparties on the city's interest-rate swaps that has the creditors taking a 25% haircut.

Austin Independent School District, Texas, can go ahead with plans to issue $490 million of GO bonds after judge says May ballot met legal requirements.

A Virginia circuit court is preparing to reconsider Fluvanna County's lawsuit against financial advisor Davenport & Co., after the state supreme court rejected the firm's motion for a rehearing of the state Supreme Court's decision to reverse a ruling that had favored it.

Jefferson County, Ala., has chosen Citi as senior underwriter for a $1.89 sewer warrant refinancing to take place in December after emerging from Chapter 9 bankruptcy.

Michigan's emergency loan board Monday approved a move by Pontiac emergency manager to suspend the city's retiree health care payments for up to two years.

Detroit said in a Monday morning court filing that it had reached an important settlement with a creditor that renders moot an escalating dispute with bond insurer Syncora Guarantee Inc. over casino revenues.

The largest creditors in San Bernardino, Calif.'s Chapter 9 bankruptcy are taking opposing positions on a decision that will determine the city's eligibility to be in bankruptcy.