Law and legal issues

The judge overseeing Jefferson County, Ala.'s bankruptcy case this week began hearings on a $1.63 billion class-action claim seeking to invalidate the county's sewer warrants.

Treasurer Andy Dillon said Detroit can avoid bankruptcy, after a Michigan review team found that a financial emergency exists in the city paving the way for an emergency manager.

Stockton, Calif., has shot back at challenges to its eligibility for bankruptcy protection ahead of a hearing set for next week.

Bankrupt Jefferson County, Ala., reached a settlement with Depfa Bank to reduce the interest rate on $162.5 million of variable-rate school warrants.

Court ruling that the state school funding formula is unconstitutionally flawed could lead to stronger credit ratings for local school districts.

The former comptroller of a small Illinois city faces nearly 20 years in prison under the sentence handed down by a federal judge following her conviction for stealing more than $53 million from city coffers over two decades.

Pennsylvania's 20-year, $35 billion with Camelot Global Services to run the state's lottery system is unconstitutional, said Attorney General Kathleen Kane.

A San Bernardino County lawsuit seeking to recoup a portion of a $102 million settlement with a developer could force Upland, Calif. into bankruptcy, the city manager says.

A federal judge sentenced former Central Falls, R.I., mayor Charles Moreau to two years for corruption that occurred while the city was plummeting toward bankruptcy.

Harrisburg, Pa., has cleared a legal hurdle to the auction of its Wild West artifacts, which officials say could bring up $6 million to the teetering city.

Baltimore Mayor Stephanie Rawlings-Blake on Monday announced the first of a series of fiscal reforms designed to head off a financial nightmare that a recent projection suggested could be heading the city's way.

San Bernardino heads into a second status conference on its bankruptcy Tuesday missing two key players – interim city manager Andrea Travis-Miller and finance director Jason Simpson.

Moody's Investors Service said the recent ruling in favor of Assured Guaranty Municipal Corp. against Flagstar Bancorp Inc. is a credit positive for financial guarantors.

Kansas Gov. Sam Brownback says he wants to resolve the state's school funding legal dispute through negotiation.

Bank of New York Mellon's suspension of bankrupt Jefferson County, Ala.'s sewer warrant payments prompted Standard & Poor's to drop its rating to D, while Moody's said investors are now subjected "to the risk of higher losses."

Texas charter school leaders say they will continue the fight for facilities funding from the state despite a recent setback in court.

Harrisburg, Pa., councilman Brad Koplinski, a major figure in the capital city's debt crisis, said he will run for Pennsylvania lieutenant governor as an advocate for localities.

Baltimore is setting a precedent by being the first large city to use long-term forecasting to avoid becoming the next bankruptcy story, city officials and their advisors said Thursday.

Reform city leaders for the now notorious Bell, Calif. are working to repair the financial damage done by eight former city leaders now being tried on charges of embezzlement and mismanagement.

A ten-year forecast commissioned by the mayor and released Wednesday reveals that Baltimore could be on a path to bankruptcy without "serious fiscal reforms."