Law and legal issues

SAN FRANCISCO — City Council members in Vallejo, Calif., will judge a long-term budget plan Tuesday that outlines a way for the bankrupt city to crawl back into the black.

ALAMEDA, Calif. — Hawaii and Citi have announced a legal settlement that will allow the state to exit from its $869 million auction-rate securities portfolio within five years.

Market participants remain divided over the Municipal Securities Rulemaking Board's draft proposal to prohibit dealers from underwriting new negotiated or competitive bond deals if they served as the issuer's financial adviser.

The controversy over the Atlantic Yards development project in Brooklyn spawned lawsuits, protests — and now a theater production.

Former political adviser Hank Morris last week pleaded guilty in a pay-to-play kickback scheme involving the New York State pension fund.

BRADENTON, Fla. — The Florida Supreme Court has handed down a ruling that reaffirms the use of certificates of participation in the state, according to attorneys.

CHICAGO — The Illinois Railsplitter Tobacco Settlement Authority yesterday received A-level ratings from Standard & Poor’s on its $1.46 billion issue of tax-exempt tobacco bonds set for next week.

The Camden County, N.J. , Pollution Control Financing Authority will tap into various dedicated funds to avoid defaulting on $26.1 million of incinerator debt due Dec. 1.

Moody’s Investors Service Tuesday revised Pittsburgh’s outlook to negative from stable as Pennsylvania’s second-largest city may face large pension contribution increases if its retirement fund falls under state oversight.

Lake County officials said they plan to sue the state next month over a law requiring the county to adopt a 1% local option income tax in order to lift a freeze on its property tax revenue.

A Cook County Circuit Court judge earlier this month denied Chicago’s motion to dismiss a lawsuit that challenges the legality of its $1.15 billion, 75-year lease of its parking meter system to Chicago Parking Meters LLC.

BRADENTON, Fla. — The Clay Gas Utility District of Clay County, Tenn., filed a notice last week saying that it has not made scheduled principal and interest payments on its bonds since 2000.

The National Association of Bond Lawyers is warning the Securities and Exchange Commission that applying its asset-backed securities rules to municipal bonds, as proposed, would violate existing law and run contrary to congressional intent.

Ambac Assurance Corp. is close to reaching a settlement that would wipe away more than $500 million of exposure to revenue bonds issued by the Nevada Department of Business and Industry for the Las Vegas Monorail, according to its regulator Thursday.

SAN FRANCISCO — The Asian Art Museum is struggling to recover its financial footing while renegotiating its debt with creditors.

CHICAGO — Officials in Hamtramck, Mich., said they would try to set up a meeting with state Treasurer Robert Kleine in a fresh effort to win permission to file for bankruptcy.

The scandal-plagued city of Bell agreed to appoint a monitor to oversee its operations and finances.

New York attorney general and Governor-elect Andrew Cuomo sued former Quadrangle Group principal Steven Rattner Thursday over his alleged role in a widespread kickback scheme to obtain investments from New York’s largest pension fund, the $135 billion Common Retirement Fund.

SAN FRANCISCO — Vallejo City Council members are weighing a contentious budget plan as the California city struggles to emerge from Chapter 9 bankruptcy.

ALAMEDA, Calif. — A lawsuit filed Tuesday by opponents of California’s plans to sell 11 state office buildings for one-time revenue resulted in a one-day delay to the state’s plans to sell $12 billion of notes and bonds this week.