Law and legal issues

The attorney representing the Harrisburg City Council in its bankruptcy filing is asking the Internal Revenue Service and the Securities and Exchange Commission to investigate the financing of the incinerator renovation project that left Pennsylvania's capital city with $310 million of bond debt and on the cusp of a state takeover.

WASHINGTON - In the first decision of its kind stemming from class action litigation over the collapse of the auction-rate securities market, a federal appeals court panel in New York ruled Monday that Merrill Lynch & Co. had adequately disclosed to customers that it was preventing auctions from failing.

The Royal Bank of Scotland has withdrawn from three suits against municipal bond insurer MBIA Inc.

BRADENTON, Fla. - Since Jefferson County, Ala., filed the county's largest municipal bankruptcy in history last week, attention has largely focused on the county's $3.14 billion of nonrecourse sewer system debt.

BRADENTON, Fla. — Standard & Poor’s on Friday slashed the rating on Jefferson County’s sole investment-grade credit to junk in response to the government’s filing for bankruptcy.

Even with the market closed for Veteran's Day, the Jefferson County, Ala., bankruptcy filing still weighed on the minds of muni market participants as they examined its effects on the broader market.

Alabama issuers should not see their ratings lowered by the Jefferson County bankruptcy action, but investor perception could take its toll on future issues.

California's redevelopment agencies may be closer to death's door than previously thought after a state Supreme Court hearing on Thursday.

The Municipal Securities Rulemaking Board has referred unregistered municipal advisors to the Securities and Exchange Commission for investigation and possible enforcement action, the board said Thursday.

The Financial Industry Regulatory Authority has fined Morgan Stanley $1 million and ordered it to pay $371,476 in restitution to customers for excessive markups and markdowns on municipal and corporate bonds.

The bond insurer for Harrisburg, Pa.'s troubled incinerator renovation project has rejected a request from the city to forgive $100 million of debt.

Retail reaction to the announcement late Wednesday that Jefferson County, Ala., filed the largest municipal bankruptcy in U.S. history is likely to be muted, yet will still be closely monitored, portfolio managers say.

Voters in Vallejo, which recently exited bankruptcy, appeared set to defeat a 1% sales tax hike measure after Tuesday's election.

Retail reaction to the announcement late Wednesday that Jefferson County, Ala., filed the largest municipal bankruptcy in U.S. history is likely to be muted, yet will still be closely monitored, portfolio managers say.

CHICAGO - Michigan Gov. Rick Snyder has declared that Flint is in a state of financial emergency, setting up the long-struggling city for a state takeover.

BRADENTON, Fla. - Jefferson County, Ala., commissioners Wednesday voted to file the largest municipal bankruptcy in U.S. history, saying they could not come to terms with creditors over restructuring $3.14 billion of defaulted sewer debt.

SAN FRANCISCO - California redevelopment agency advocates and critics are on tenterhooks this week as the state Supreme Court is set to hear a case that will determine their future.

BRADENTON, Fla. - Jefferson County, Ala., commissioners met Tuesday behind closed doors with attorneys discussing whether to finalize a pending settlement with creditors or to file bankruptcy.

WASHINGTON - Wachovia Bank NA, now Wells Fargo & Co., has reached a tentative settlement of a consolidated class- action suit with municipal issuers over antitrust charges of bid-rigging for municipal investment, derivatives and other contracts.

SAN FRANCISCO - The San Diego Unified School District's board, after warning in October that the district could face insolvency and after being downgraded last week, is now talking about placing a $1.5 billion to $2 billion bond issue on the ballot in November 2012.