Law and legal issues

Stockton, Calif., has declared another fiscal emergency in an effort to try to reduce rising labor costs.

CHICAGO — The Illinois attorney general’s office and lawyers for a liquor distributor squared off before the state Supreme Court this week over whether the state’s 2009 $31 billion public works program — and the funding streams approved to repay bonding for it — are legal.

SAN FRANCISCO — Southern California’s San Joaquin Hills toll road has gotten a green light from bondholders to restructure $2 billion of debt that helps avoid a default.

A Detroit-based group opposed to Michigan’s controversial new emergency financial-management law filed petition language with the state Board of Canvassers for a referendum on it.

The Financial Industry Regulatory Authority has fined Kane, McKenna Capital Inc. and Wulff, Hansen & Co. a total of $27,500 for municipal transaction disclosure and trade rule violations.

BRADENTON, Fla. — Florida’s Citizens Property Insurance Corp. plans to sell up to $900 million of revenue bonds to provide liquidity for the upcoming hurricane season, which begins June 1.

CHICAGO — Michigan Gov. Rick Snyder’s choice for emergency manager of Detroit ­Public Schools will enjoy broader powers than his predecessor, but faces a structural deficit that has increased more than 60% in two years.

DALLAS — Glendale, Ariz., has committed another $25 million to keep the National Hockey League’s Phoenix Coyotes playing in city-owned Jobing.com arena for another year, though officials have not yet identified where the money will come from.

DALLAS — An alleged pay-to-play scheme in New Mexico involving former Gov. Bill Richardson’s administration was similar to one in New York that resulted in criminal penalties, according to lawsuits filed in state and federal court.

Two Florida lawmakers who unsuccessfully sued Republican Gov. Rick Scott to prevent him from turning down $2.4 billion of federal funds for high-speed rail blasted the governor Monday when other states and Amtrak won the money.

The receiver in control of Jefferson County’s sewer system may delay filing a report with the court because of damages caused by tornadoes at the end of April, according to the Birmingham News.

Assured Guaranty Ltd. reported higher operating earnings than expected in the first quarter due to a large out-of-court settlement, but said new business production in public finance fell by about one-half compared to the same quarter last year.

SAN FRANCISCO — Vallejo, Calif., will likely exit Chapter 9 bankruptcy by the end of July as it nears deals with two of its unions, according to attorneys.

WASHINGTON — The Internal Revenue Service’s tax-exempt bond office has received referrals of around 30 whistleblower claims of potential abuses in the municipal bond market, an official said Friday.

Ambac Financial Group Inc., the holding company for bankrupt bond insurer Ambac Assurance, has agreed to settle a lawsuit claiming it misled shareholders about the risks the company took on insuring subprime mortgages.

WASHINGTON — A federal court in New Jersey has approved UBS Financial Services Inc.’s $47.2 million settlement with 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 105 state and local issuers that were defrauded.

MBIA Insurance has filed a motion in the New York State Supreme Court seeking documents from Credit Suisse about residential mortgage-backed securities it insured. According to the lawsuit, Credit Suisse failed to follow guidelines it established with the insurer and MBIA has suffered large losses as a result.

SAN FRANCISCO — A bill that would force California municipal governments to undergo mediation before allowing them to file for bankruptcy is moving through the Legislature.

The troubled city of Montebello, Calif., took another financial hit last week when federal housing officials suspended funding to the city and demanded repayment of $5 million in grants, according to local news reports.

SAN FRANCISCO — At its inception the South Bay Expressway toll road was promoted as a model public-private partnership. It took ages to build, then quickly plunged into bankruptcy.