Law and legal issues

Indiana lawmakers will debate whether to allow municipalities to enter into bankruptcy as they hammer out final differences to a bill passed by both chambers but stripped of the Chapter 9 option by the House.

With federal financial regulators scrutinizing Rhode Island's bond offerings and pension disclosures, the state has hired disclosure counsel to review its practices and pave the way to issuing new bonds.

Clifton Gunderson LLP will help Harrisburg with its overdue 2009 audit and its 2010 audit.

WASHINGTON — A bill by House Republicans that would delay implementation of derivatives rules has sparked a firestorm of controversy, with officials and lawmakers trading jabs over the pace of regulatory reform.

CHICAGO — Detroit’s two pension funds late Monday filed a lawsuit against Michigan Gov. Rick Snyder and Treasurer Andy Dillon over the state’s controversial emergency financial management law.

CHICAGO — A failed film studio project touted by a Hollywood producer has left a Detroit suburb struggling to cover payments on $31 million of bonds that have sparked an informal investigation by the Securities and Exchange Commission.

Two Federal Reserve economists are refuting claims by some analysts that the muni market is headed for several billion dollars in defaults, calling the projections overblown and out of sync with past recessions.

At a meeting in Nashville last week, the Municipal Securities Rulemaking Board voted to further amend a proposed rule that would prohibit dealer-financial advisers from switching roles and acting as an underwriter and muni adviser on the same transaction.

CHICAGO — Jury selection will begin Wednesday in the retrial of former Illinois Gov. Rod Blagojevich on federal corruption and pay-to-play charges following a judge’s refusal last week to grant the defense’s request for a delay.

BRADENTON, Fla. — The Alabama Supreme Court Friday denied a motion by JPMorgan and other defendants to dismiss a lawsuit that was filed by Jefferson County in November 2009.

Bank of America Corp.’s agreement to pay Assured Guaranty Ltd. $1.1 billion in mortgage put-backs sent bond insurer share prices up more than 20% on Friday.

Harrisburg last week received four responses to its request for proposals to assist in compiling its long-awaited 2009 audit, as well as its 2010 audit.

BRADENTON, Fla. — Jefferson County, Ala., faces a $77 million deficit by the end of the fiscal year due primarily to the loss of tax revenues while “contingent” expenses could render the county insolvent, according to the national turn-around firm FTI Consulting.

WASHINGTON — The Financial Industry Regulatory Authority fined Jefferies & Co. $1.5 million for failing to disclose that it was earning additional compensation when selling new-issue, auction-rate securities to clients.

The bankrupt city of Vallejo has hired Deborah Lauchner as its new finance director.

WASHINGTON — The Securities and Exchange Commission should rank nationally recognized credit rating agencies based on performance and should help investors hold them accountable in civil lawsuits over unjustifiable inflated ratings, a bipartisan congressional panel recommended Wednesday.

CHICAGO — Detroit Mayor Dave Bing told the City Council Tuesday that failure to implement his budget proposals would lead to a state-mandated emergency financial takeover.

SACRAMENTO — Vallejo, Calif., is closing in on settlements with creditors that would smooth its escape from bankruptcy, according to its attorney.

CHICAGO — Iowa’s Xenia Rural Water District has proposed a five-year restructuring plan that calls for investors who hold $83 million of revenue bonds to receive full payment. However, it hinges on the willingness of other creditors to “share in the pain” of restoring the district to fiscal solvency by forgiving some debt, said interim executive director Marc DeLong.

WASHINGTON — The prospect for a federal government shutdown grew more ominous Thursday, leaving state and local groups with unanswered questions about whether federal payments will be halted if lawmakers fail to reach agreement on a fiscal 2011 budget compromise before midnight Friday.