Law and legal issues

Former Maine Turnpike Authority executive director Paul Violette has settled a civil lawsuit over allegations that he used agency funds for personal benefit, agreeing along with two surety bonding providers to pay back damages totaling $430,000.

U.S. Bank NA notified the market that it was sued by Fiddler's Creek Community Development District 2 in South Florida.

A ruling that Colorado's school funding formula violates the state constitution is drawing scrutiny in several states that face similar legal challenges.

The Santa Rosa Bay Bridge Authority's new board learned Wednesday night that its defaulted bonds, sold to build the Garcon Point Bridge in north Florida, may be repaid without losses to investors.

OppenheimerFunds has filed a lawsuit against ACA Financial Guaranty Corp. for failure to pay on defaulted bonds it insured.

Federal Judge Thomas Bennett, who is overseeing Jefferson County’s bankruptcy case, said Monday that he may not make a decision about whether the receiver will remain in charge of the county’s sewer system until after Dec. 23.

Jefferson County will be without a finance director after Friday.

A federal judge late Tuesday afternoon denied an appeal by the Harrisburg, Pa., City Council of a ruling that invalidated its bankruptcy filing.

The Harrisburg City Council will appeal a federal judge's ruling that invalidated the bankruptcy filing of Pennsylvania's capital city, according to its attorney.

A federal court in New Jersey has approved a $46 million settlement between Wachovia Bank NA, now Wells Fargo Bank NA, and the Securities and Exchange Commission over bid-rigging of municipal-bond related contracts as well as the amounts of restitution that are to go to each of the almost 60 state and local issuers that were defrauded.

Jefferson County is not eligible to file for bankruptcy because it has no debt outstanding that qualifies under the Alabama law that authorizes municipalities to file for Chapter 9, creditors argued in court filings last week.

U.S. Bank is clawing back debt-service payments it erroneously paid investors after a public arena in eastern Washington defaulted.

With trading active on much of bankrupt American Airlines' $3.2 billion of special facilities revenue bonds, some market participants are sounding a cautionary tone in assessing their value, as bargain hunters eye the airline's discounted bonds secured by collateral.

The Securities and Exchange Commission said late Thursday that it is a "statutory party in interest" in Jefferson County, Ala.'s bankruptcy case and wants to receive all notices and documents filed with the court.

Wachovia Bank NA, now Wells Fargo Bank NA, has agreed to pay $148 million to settle securities, tax and other federal and state law violations stemming from fraudulently engaging in secret arrangements with bidding agents to win business from municipalities and profits for itself from the reinvestment of muni proceeds.

The potential ouster of the Jefferson County, Ala., sewer system's receiver in connection with the county's bankruptcy case could derail the long-held legal precedent that bonds secured by a specific pledge of revenues will continue to be paid during a Chapter 9 proceeding, according to creditors and industry participants.

A federal court judge in Chicago handed down a 14-year prison sentence to former Illinois Gov. Rod Blagojevich, who was convicted in June of corruption charges of using his office to enrich his campaign coffers and to try to profit from his pick to fill the Senate seat of President Obama.

Former JPMorgan banker Douglas MacFaddin and the Securities and Exchange Commission are seeking court sanctions against former Jefferson County commissioner Shelia Smoot for failing to appear for depositions and produce documents on several occasions.

The Inland Valley Development Agency in California disclosed that it and the San Bernardino International Airport Authority are being investigated by the Federal Bureau of Investigation.

The future of the Suffolk Regional Off-Track Betting Corp. in eastern Long Island is in question after a federal judge dismissed its Chapter 9 bankruptcy petition.