Law and legal issues

SAN FRANCISCO - California redevelopment agency proponents have filed a lawsuit in state Supreme Court to block laws that would kill or drastically curtail the RDAs to fill a gap in the recently adopted budget.

The Central Falls, R.I., City Council will hold its first public meeting in more than a year after Gov. Lincoln Chafee signed a bill requiring more input from local elected officials in communities under state receivership.

BRADENTON, Fla. - Jefferson County is asking creditors holding its $3.14 billion of defaulted variable- and auction-rate sewer warrants to take a haircut of $1.3 billion, the Birmingham News said Sunday.

WASHINGTON - The Financial Industry Regulatory Authority fined seven firms a total of $362,500 for violations of municipal securities rules.

Massachusetts Attorney General Martha Coakley has asked a bankruptcy judge to review the proposed $38 million sale of Quincy Medical Center Inc. to Steward Health Care System LLC.

CHICAGO - Moody's Investors Service this week said it views positively recent court rulings in Colorado and Minnesota dismissing litigation that challenged legislative cuts to retirees' pension cost-of-living increases, and expects the rulings will spur other states to act.

WASHINGTON - Securities and Exchange Commission chairman Mary Schapiro is expected to preside over a one-day hearing on the municipal securities market near Birmingham, Ala., in two weeks, sources said.

WASHINGTON - George K. Baum & Co. and CDR Financial Products, Inc. were bidding agents for muni reinvestment transactions involving J.P. Morgan Securities where bid-rigging occurred, according to court and bond documents as well as transaction participants.

Gov. Lincoln Chafee has signed a bill requiring Rhode Island municipalities to guarantee that lenders get first rights to property taxes and general revenue, should the government entity file bankruptcy.

The financial troubles in North Las Vegas may be getting so bad the state government may step in, according to local press reports.

WASHINGTON - First Southwest Co., as bidding agent for a repurchase agreement related to a $233 million bond deal in Texas for which it was financial adviser, improperly allowed JPMorgan Securities to lower its bid for the repo, reducing the issuer's investment rate, according to documents and transaction participants.

CHICAGO - The Lombard, Ill., Public Facilities Corp. drew $1.5 million from reserves to complete July 1 debt service payments on a portion of its $187 million of bonds issued to help finance a hotel and conference center that is struggling to remain solvent.

Harrisburg's City Council will hold a special legislative session at 6 p.m. Tuesday to accept or reject a proposed financial recovery plan for Pennsylvania's capital city, which is saddled with $220 million of bonds outstanding on its incinerator.

Assured Guaranty Corp. won't seek to appeal a New York State court's ruling that it must honor coverage of defaulted debt issued by the Xenia Rural Water District in Iowa.

Jefferson County on Monday turned over sewer accounts containing about $60 million in revenue to the court-appointed receiver for the sewer system, according to the Birmingham News.

BRADENTON, Fla. - The Kentucky Transportation Cabinet on Monday filed a motion in federal court to intervene in a lawsuit that the agency believes could delay the long-planned Ohio River Bridges Project.

WASHINGTON - The Municipal Securities Rulemaking Board may boost its oversight of the derivatives market, including guaranteed investments contracts that are at the center of a bid-rigging investigation by the Justice Department and other federal and state agencies, an MSRB official said Tuesday.

Oakland County will require the cash-strapped city of Pontiac to prepay the county on a monthly basis for police services that it is set to begin providing next month.

MBIA Insurance Corp. voluntarily dismissed with prejudice its case against Bank of America Merrill Lynch, prompting analysts to speculate that a settlement could be reached soon.

WASHINGTON - In a ruling that could spell trouble for Wedbush Securities Inc., a municipal securities trader snagged a $3.5 million arbitration award from the firm, based on its failure to pay him incentive-based compensation.