Law and legal issues

WASHINGTON — The Securities and Exchange Commission will hurt state and local entities if it adopts rules requiring their appointed board members to register with the SEC and possibly the Municipal Securities Rulemaking Board, market participants are warning.

Harrisburg could receive a financial recovery plan by ­­mid-May as Pennsylvania ­Wednesday announced that Novak Consulting Group will head a team of advisers to work with city ­officials on a fiscal strategy.

CHICAGO — Indiana lawmakers Wednesday morning held a first hearing on a bill that would allow local units of government to file for Chapter 9 bankruptcy protection.

CHICAGO — After years of perceived mismanagement and allegations of corruption, a new administration has taken over the helm of Cook County, Ill. with fiscal responsibility as its mantra.

SAN FRANCISCO — Oakland’s city attorney has taken a public stand against a plan by the city to sell bonds so it can continue to skip making payments toward growing public-safety pension liabilities.

Shares of MBIA Inc. jumped more than 10% Tuesday after a New York appeals court dismissed a lawsuit that had contested the company’s February 2009 restructuring.

The Hamtramck City Council was poised Tuesday to approve a resolution seeking a $2.5 million loan from Michigan to help pay its bills even as it continues to push the state to allow it to become the first Michigan municipality to file for bankruptcy.

Ambac Assurance’s bid to protect its municipal bond insurance book from the Internal Revenue Service faces a daunting hurdle in federal court as the U.S. government argues it has every right to collect taxes it is owed regardless of how the company structures itself.

Moving money market funds to a floating net-asset value would cause investors to flee the funds and ultimately deprive state and local governments of needed capital, several municipal market groups are warning in a letter to the Securities and Exchange Commission.

ALAMEDA, Calif. — Holders of Chowchilla, Calif.’s 2005 lease revenue bonds will get their most recent interest payment, after the trustee emptied out the last of the debt-service reserve fund.

CHICAGO — Sylvan Township, Mich., will likely need to impose a steep property-tax hike on its residents to cover payments on bonds that were issued to support a now-failed special assessment district.

SAN FRANCISCO — Vallejo, Calif., is on track to submit a plan to a federal judge next week to exit the largest municipal bankruptcy in more than a decade.

WASHINGTON — Senate Budget Committee chairman Kent Conrad said Friday that his panel needs to come up with a plan to help states that approach Congress seeking ­assistance because of serious financial troubles.

The Securities and Exchange Commission on Friday charged two former portfolio managers with defrauding a tax-free mutual fund that invests primarily in municipal debt issued in Utah. It appears to be the first such case in which portfolio managers for a registered investment adviser were charged with taking fees from municipal bond issuers, sources said.

CHICAGO — The U.S. Federal Trade Commission last week filed a pair of complaints against Promedica Health System Inc., a leading health care system in northwest Ohio, charging that its acquisition of a rival hospital is anticompetitive and would allow the Toledo-based system to unfairly raise prices for services.

ALAMEDA, Calif. — A major newspaper is reporting a Securities and Exchange Commission investigation into California’s pension disclosure practices, but the reported subjects of the probe say they haven’t heard a thing from the SEC.

SAN FRANCISCO — The Asian Art Museum Foundation and San Francisco city officials said they reached a deal Wednesday with JPMorgan Chase & Co. and insurer MBIA to restructure $120 million of variable-rate bonds, securing the financial stability of the largest collection of Asian art in the Western world.

WASHINGTON — Issuers and their attorneys are fighting a provision in the Securities and Exchange Commission’s proposed rules for municipal advisers that would require appointed board members of municipal entities to register with both the SEC and the Municipal Securities Rulemaking Board if they advise on the issuance of municipal ­securities.

ALAMEDA, Calif. — Rocked by the recession, the rural California city of Chowchilla has stopped making payments on the bonds it used to finance its city hall.

CHICAGO — Struggling to remain afloat, Iowa’s Xenia Rural Water District is working on a final debt restructuring plan to submit to its board and may do so later this month, officials said Wednesday.