Law and legal issues

While Dexia Group has a substantially reduced its footprint in the U.S. municipal market, its lingering financial woes are still a thorn in the side for some bond issues exposed to the troubled Franco-Belgian lender.

SAN FRANCISCO - Moody's Investors Service said the San Jose Redevelopment Agency's $1.7 billion of outstanding senior bonds could suffer should the RDA be forced to default on a floating-rate bond issue.

A major effort by the Legislature to privatize many of Florida’s prisons was ruled unconstitutional by a state judge last week.

Jefferson County said in a material-event notice Tuesday that it had another payment default on some of its outstanding sewer warrants.

SAN FRANCISCO - Windrush School, a 35-year-old private school located in the East Bay suburbs of San Francisco, filed for Chapter 11 protection in the U.S. Bankruptcy Court in Oakland last week when it couldn't reach a forbearance agreement with bondholders on $13 million of bonds issued in 2007.

A possible state-ordered takeover of Flint advanced last week when Michigan Gov. Rick Snyder appointed a financial review team to examine the troubled city’s finances.

DALLAS - The Tomball Hospital Authority near Houston has called or defeased its $111.4 million of tax-exempt bond debt after the sale of the Tomball Regional Medical Center to for-profit Community Health Systems.

SAN FRANCISCO - California Gov. Jerry Brown has vetoed legislation that would have helped the San Jose Redevelopment Agency avoid a $100 million default.

Moody's Investors Service late Tuesday placed the Ba1 rating for Harrisburg Authority's $69.4 million of Series 2008 water refunding bonds under review for possible downgrade.

BRADENTON, Fla. - Ten volunteers are interested in serving on the Santa Rosa Bay Bridge Authority that oversees the defaulted bonds sold to build the 3.5-mile-long tolled Garcon Point Bridge in North Florida.

Colorado State Treasurer Walker Stapleton and Attorney General John Suthers have filed a lawsuit in a Denver state district court to obtain beneficiary information from the board that oversees the pension fund for state workers.

A ruling last week in a Pulaski County Circuit Court stymied efforts by the Arkansas Department of Education to withhold excess property tax revenues from school districts in Carroll and Garland counties.

CHICAGO - The Securities and Exchange Commission is among the list of regulators now probing the failed Mamtek US Inc. artificial sweetener factory in Moberly, Mo., that received local and state financing support, including recovery zone facility bonds backed by an appropriation pledge from the city that it refused to honor last month.

Bond banking, law, and government all decorate Mark Schwartz's resume. "I have a tripolar background," he said.

The City Council in financially strapped Harrisburg is considering a series of bills to increase parking revenue.

CHICAGO - The Illinois Supreme Court this week left intact a lower court ruling that keeps alive efforts to resurrect litigation that resulted in a $10.1 billion verdict against Philip Morris USA Inc. in a case over the company's marketing of "light" cigarettes.

With the stroke of a pen, California Gov. Jerry Brown could avoid one of the largest municipal bond defaults of 2011. If not, the San Jose Redevelopment Agency could default on nearly $100 million of variable-rate debt this November.

The Los Angeles Unified School District board voted last week to join opponents of local redevelopment agencies in the legal battle over who should control redevelopment funds, according to the Los Angeles Times.

California’s budget has inspired three new lawsuits this week, adding to worries about its viability.

While Pennsylvania lawmakers are crafting a state takeover of Harrisburg, officials in the financially strapped capital aren't giving up control without a fight.