Law and legal issues

CHICAGO — An effort afoot to suspend and overturn Michigan's emergency manager law could have negative consequences for the fiscally stressed local governments the law aims to help, Moody's Investors Service warns.

SAN FRANCISCO — Standard & Poor's downgraded Stockton, Calif., for the third time in less than two weeks, to "selective default" from CC.

CHICAGO — Bank of America NA sued the St. Louis-based Jewish Community Center last week, alleging the nonprofit has withheld more than $4 million it owes the bank as a tactic to win more favorable terms on the repayment of $45 million of bonds held by the bank.

DALLAS — A panel of 22 Texas lawmakers has been formed to conduct a comprehensive review of the state's school finance system in the wake of five recent lawsuits challenging how Texas funds local school districts.

The Nassau Off-Track Betting Corp. has agreed to pay harness horse-racing tracks to settle a long-running, multimillion-dollar lawsuit.

When the Pennsylvania Economic Development Authority issued $107 million of debt in January to bail out defaulted bonds in connection with the 10-story Forum Place office building in Harrisburg, critics called it another incinerator-type fiasco in Pennsylvania's capital city.

A Superior Court judge on Wednesday denied a request for an injunction from a San Diego hotel workers union seeking to block a vote on a special tax to fund the San Diego Convention Center expansion.

A 25-year-old San Diego utility customers advocacy group is disbanding in the wake of a federal grand jury investigation into its business practices and leadership.

Standard & Poor’s and Moody’s Investors Service further downgraded Stockton, Calif., bonds this week after its City Council voted to delay bond payments and enter negotiations with creditors to try to avoid bankruptcy.

Three months into its Chapter 11 bankruptcy, American Airlines Inc. has begun to show its hand to investors holding $3.2 billion of the carrier's special facilities revenue bonds by making good — at least for now — on some debt-related payments while moving as expected to shed other obligations.

SAN FRANCISCO — The Stockton, Calif., City Council voted Tuesday night to default on payments tied to $330 million of bonds and begin negotiations to try to avoid Chapter 9 bankruptcy.

LOS ANGELES — Officials at Downey Regional Medical Center are probably wondering if five will be their lucky number after the bankrupt Southern California hospital announced the fifth postponement of a planned bond buyback Monday in a disclosure filing.

A bankruptcy court judge in Alabama Wednesday afternoon certified multiple appeals filed in Jefferson County, Ala.'s Chapter 9 case, allowing them to be heard in the 11th Circuit Court of Appeals in Atlanta.

Federal Bankruptcy Judge Thomas Bennett has scheduled a hearing for March 23 to hear Assured Guaranty Municipal Corp.’s legal motion for relief from Jefferson County, Ala.’s bankruptcy.

LOS ANGELES — A Los Angeles County district attorney's office spokeswoman confirmed that prosecutors launched an inquiry in November into an ethics complaint made by a private citizen against county assessor John Noguez.

Cook County Commissioner and former Chicago Alderman William Beavers was indicted last week on three counts of filing false income tax returns and one count of endeavoring to obstruct and impede the Internal Revenue Service.

Stockton, Calif.'s announcement that it may cease general fund payments toward debt service on hundreds of millions of dollars in bonds, and take initial steps towards bankruptcy, is still shaking out in the market.

CHICAGO — The St. Paul Port Authority is set to issue a tender invitation in April to holders of the remaining $51.7 million of defaulted industrial revenue bonds as agreed to under a class action settlement aimed at resolving five-year-old litigation over the troubled 876 Bond Fund.

The attorney representing Harrisburg, Pa.'s City Council in its bankruptcy filing has filed another appeal of the rejection of its Chapter 9 case.

Stockton, Calif., City Council members will be asked Tuesday to stop making general fund payments toward several bond issues and to take the first step toward a Chapter 9 bankruptcy filing, according to a disclosure statement filed Friday on the MSRB's EMMA website.