Law and legal issues

BRADENTON, Fla. — A convergence of factors is pushing bond issuance costs up this year — including fallout from the “headline risk” associated with predictions of increased municipal bankruptcy, local officials from across Florida learned Friday.

SAN FRANCISCO —– The bankrupt city of Vallejo, Calif. has so far avoided inflicting severe damage to its bondholders, experts say.

ALAMEDA, Calif. — Los Angeles County has withdrawn from the California Statewide Communities Development Authority, the state’s largest conduit issuer.

State officials on Friday angrily denounced reports that senators may be quietly developing a proposal to allow states facing fiscal crises to seek protection in federal bankruptcy court so that a judge could alter their obligations, including outstanding debt levels.

ALAMEDA, Calif. — California Gov. Jerry Brown has extended the state of fiscal emergency declared by his predecessor, Arnold Schwarzenegger.

A judge last week delayed to March 15 a hearing regarding a suit that could force Harrisburg to repay debt-service costs on $282 million of outstanding incinerator debt before meeting other expenses.

A provider of residential services for the disabled that was part of a pooled bond deal issued by the Dormitory ­Authority of the State of New York agreed to pay $18 million in damages to settle Medicaid fraud charges, the New York attorney general announced last week.

VALLEJO, Calif. — Officials said Thursday that Vallejo is nearing a deal with its largest creditor and is looking at curbing employee benefits as it struggles to climb out of bankruptcy.

WASHINGTON — The Securities and Exchange Commission approved two sets of rules for asset-backed securities Thursday, including one that would apply to certain municipal securities in early 2015.

WASHINGTON — The Utah Housing Corp. has filed a lawsuit against two brokers — CDR Financial Products Inc. and Investment Management Advisory Group Inc. — and eight providers of guaranteed investment contracts, claiming they knowingly engaged in bid-rigging activities to artificially suppress interest rates on investment agreements it purchased for its housing bond proceeds.

WASHINGTON — Claims that states and localities are facing massive budget gaps, unfunded pension liabilities, and health care costs that will lead to bond defaults and bankruptcy filings are greatly exaggerated, and mask the need for states to overhaul out-of-date tax systems and make other structural changes, a new report warns.

SAN FRANCISCO — The city of Vallejo, Calif., filed a plan to exit bankruptcy that proposes to pay unsecured creditors 5 to 20 cents on the dollar.

WASHINGTON — The Financial Industry Regulatory Authority has censured and fined Merrill Lynch, Pierce, Fenner & Smith Inc. $500,000 for failing to establish and maintain written supervisory procedures to ensure that its representatives considered customers’ state income-tax benefits in their suitability analyses of 529 college saving plans.

CHICAGO — American Airlines and United Airlines on Tuesday sued Chicago to block its financing of remaining projects under an $8 billion expansion program at O’Hare International Airport ahead of the city’s planned sale of $1.1 billion of passenger facility charge-backed bonds next month.

WASHINGTON — The Financial Industry Regulatory Authority fined TD Ameritrade Inc., Scottrade Inc., and Fidelity Brokerage Services LLC $35,000 each for failing to disclose the underlying ratings of insured bonds, which it said constituted material information that customers purchasing the bonds needed to know.

CHICAGO — American Airlines and United Airlines on Tuesday sued Chicago to block its financing of remaining projects under an $8 billion expansion program at O’Hare International Airport ahead of the city’s sale of $1.1 billion of passenger facility charge-backed bonds next month.

ALAMEDA, Calif. — Faced with a $30 million legal judgment after losing two rounds in court, the financial fate of the small ski resort town of Mammoth Lakes is in the hands of the California Supreme Court.

Harrisburg’s $56 million 2011 budget remained uncertain Friday afternoon as Mayor Linda Thompson continued to review the spending plan.

Recurring losses from operations, a net-asset deficiency, and negative working capital are among the financial shortfalls revealed in a recent independent audit by KPMG LLC of the Resurrection Nursing Home, a nonprofit facility in Castleton, N.Y.

WASHINGTON — The Municipal Securities Rulemaking Board is expected early Friday to propose extensive pay-to-play restrictions for municipal advisers, the first significant rulemaking proposal for advisers since the MSRB began to oversee them on Oct. 1.