Law and legal issues

The 10-member state-appointed financial review team that will begin digging into Detroit's finances next week is a diverse mix of high-profile state officials and local community leaders and businessmen.

Louisiana Attorney General James Caldwell filed a federal suit last week in the District of Columbia to overturn a change in offshore oil royalty rules that could require the state to repay royalties and cut its anticipated future royalties.

Former Jefferson County Commissioner Larry Langford wants the U.S. Supreme Court to overturn his conviction.

Federal Bankruptcy Judge Thomas Bennett has ordered that an automatic stay associated with Jefferson County's bankruptcy will remain in effect through midnight Jan. 6.

A federal appeals court panel has twice denied a request by CDR Financial Products founder David Rubin to delay his criminal trial over alleged bid-rigging, slated to begin in January, because his wife is dying of cancer.

A federal indictment of former El Paso County, Texas, Judge Anthony Cobos implicates financial advisor Coastal Securities in a fraud scheme surrounding a $40 million bond refunding in 2007.

A Cook County Circuit Court judge last week dismissed a lawsuit challenging the Illinois State Toll Highway Authority’s steep increase in tolls that will take effect Jan. 1 to fund a $12 billion capital program.

GE Funding Capital Market Services Inc. has agreed to pay more than $70 million to settle antitrust, securities fraud, tax and other charges with the Securities and Exchange Commission and other regulators and law enforcement authorities for rigging bids on at least 328 muni bond reinvestment contracts in 44 states and Puerto Rico over five years, officials said Friday.

The Southern California Logistics Airport Authority has defaulted on more bonds after discovering it can't use reserves to make principal payments for some of its debt.

A coalition of 63 Texas school districts, including some of the largest in the state, filed a lawsuit Dec. 22 contending the current system for financing public education is unconstitutional.

El Mirage, Ariz., officials filed a formal response last week to allegations that the city improperly financed a campaign to sway voters in favor of an $8.5 million general obligation bond election.

Harrisburg has finally completed its financial audit for 2009, but the Harrisburg Authority is far from happy.

A Birmingham, Ala., agency has closed on $64 million in bank loans that were privately placed due to concern that the recent bankruptcy of Jefferson County would make it difficult to seek financing in the bond market.

A federal judge Wednesday denied a request by Citigroup to overturn a $54 million Financial Industry Regulatory Authority arbitration panel ruling in favor of investors for allegedly telling them that leveraged municipal bond arbitrage hedge funds posed little risk.

Contra Costa County’s pension system is suing the county over wage and benefits cuts for the system’s managers.

Harrisburg's City Council is appealing a federal judge's rejection of an earlier appeal looking to overturn the nullification of its bankruptcy filing.

Radian Asset Assurance Inc. accelerated payment of $4.9 million of bonds owed by Lambuth University, according to a market notice filed Tuesday by Bank of New York Mellon, the trustee.

The bankruptcy filing by Jefferson County could ultimately hinge on a ruling by the Alabama Supreme Court.

The trustee for $39 million of bonds sold by Moberly, Mo., to help finance an artificial sweetener factory has joined with other creditors to pursue an involuntary Chapter 7 bankruptcy filing against the Chinese company that abandoned the project and defaulted on debt payments.

Thirty-four congressmen urged Securities and Exchange Commission chairman Mary Schapiro to exempt broker-dealers and other regulated entities from its proposed municipal advisor definition, warning in a letter Monday that the failure to do so would impose unnecessary regulation and harm issuers by reducing competition.