Law and legal issues

CHICAGO — Depfa Bank Plc has formally demanded repayment of its $165 million loan to five Wisconsin school districts, calling on them to make good on their moral obligation pledge to repay the funds used to establish trusts to help pay other post-employment benefit liabilities.

Several mutual funds holding municipal bonds said they want a place at the negotiating table should Ambac Financial Group Inc. undergo any restructuring efforts.

SAN FRANCISCO — The Vallejo, Calif., City Council approved a new contract with firefighters, cutting its costs and unfunded liabilities as the city moves closer to exiting bankruptcy.

WASHINGTON — Southwest Securities Inc. has agreed to pay $470,147 to settle charges with the Securities and Exchange Commission that it co-underwrote Massachusetts bond deals within two years after its former senior vice president made political contributions to state Treasurer Timothy Cahill.

BRADENTON, Fla. — With President Obama’s signature barely dry on the massive health care reform bill, Florida Attorney General Bill McCollum Tuesday filed a lawsuit against the U.S. Department of Health and Human Services, the Treasury Department and the Department of Labor, alleging that the bill is unconstitutional.

WASHINGTON — Money-market fund officials are warning that new terms some banks and issuers are beginning to include in variable-rate debt transaction documents can be difficult to monitor and limit bondholders’ rights.

SAN FRANCISCO — The California Department of Education said 12% of the state’s school districts may be unable to meet their financial obligations between now and fiscal 2012.

Pennsylvania-based ACTS Retirement-Life Communities Inc., the largest nonprofit continuing care retirement community provider in the U.S., will affiliate with two smaller East Coast senior-living centers, a move that may boost debt-service coverage for one.

WASHINGTON — The Senate Banking Committee voted 13 to 10 along party lines Monday evening to approve a redrafted financial regulatory reform bill, with Republicans voting against the measure but vowing to work with Democrats on a compromise package before the bill reaches the full Senate for consideration, possibly next month.

WASHINGTON — With the Senate Banking Committee scheduled to begin marking up draft financial regulatory reform language as early as today, market participants are hopeful that lawmakers will be keen to fill potential loopholes in the bill’s provisions calling for the regulation of municipal market advisers.

SAN FRANCISCO — A group of California cities and municipal utilities filed suit last week seeking to disqualify a ballot measure designed to erect barriers to publicly owned electricity providers.

WASHINGTON — The Securities and Exchange Commission issued an unusual report Thursday that showed JPMorgan did not comply with the Municipal Securities Rulemaking Board’s Rule G-37 on political contributions. But the report did not charge the firm with any violation of the rule or recommend any enforcement action.

CHICAGO — The Illinois Supreme Court yesterday upheld an appellate court decision supporting the state’s decision to strip Provena Covenant Medical Center in Urbana of its property tax exemption because it failed to provide sufficient charity care in a case that has garnered national attention.

A week after a bankruptcy judge ruled that Orange County treasurer-tax collector Chriss Street had abused his position as trustee for a bankrupt trailer manufacturer, Street announced he would not run for re-election and agreed to surrender his office’s investment authority.

A federal judge Friday sentenced John Katopodis, a former Jefferson County commissioner and Birmingham City Council member, to three years and 10 months in jail on fraud convictions linked to his theft of taxpayer money intended for a poor children’s charity.

SAN FRANCISCO — Standard & Poor's downgraded Vallejo's certificates of participation to an underlying C rating from B yesterday as the California city inched closer to completing a bankruptcy restructuring that may include a debt-service moratorium.

WASHINGTON — Senate Banking Committee chairman Christopher Dodd yesterday introduced a massive, reworked financial regulatory reform bill that would require the head of the Securities and Exchange Commission’s municipal securities office to report directly to the SEC chairman, significantly raising the profile of the muni market.

A third former employee of CDR Financial Products — Douglas Alan Goldberg — has pleaded guilty to three criminal counts for participating in bid-rigging and fraud conspiracies in connection with municipal finance investment and other contracts, the Justice Department announced yesterday.

A third former employee of CDR Financial Products — Douglas Alan Goldberg — has pleaded guilty to three criminal counts for participating in bid-rigging and fraud conspiracies in connection with municipal finance investment and other contracts, the Justice Department announced Monday.

BRADENTON, Fla. — Miami, which tangled with the Securities and Exchange Commission over financial disclosure issues earlier this decade, has hired the law firm of Morgan, Lewis & Bockius to represent it in the SEC’s latest probe.