Law and legal issues

BRADENTON, Fla. - A former Birmingham, Ala., City Council member and former Jefferson County commissioner was charged Friday with 97 counts of fraud in connection with the theft of $250,000 from Computer Help for Kids, a local charity created to provide refurbished computers to disadvantaged children.

BRADENTON, Fla. - Jefferson County, Ala., commissioners yesterday approved forbearance agreement extensions on the county's troubled sewer debt as well as on $120 million of non-sewer general obligation debt.

WASHINGTON - In a hearing yesterday before a U.S. district court judge here, KBC Bank NV of Belgium agreed to give the Washington Metropolitan Area Transit Authority 10 more business days to make a $43 million termination payment on a sale-leaseback deal that has technically defaulted.

BRADENTON, Fla. - A federal judge has stayed all proceedings in New Orleans' case against its pension bond insurer and remarketing agent because the parties mutually agreed to work on a settlement.

WASHINGTON - Four nonprofit student loan lenders are urging the Treasury Department to provide issuers of student loan-backed debt with liquidity facilities, such as standby purchase agreements, so that the issuers can convert their existing auction-rate securities into variable-rate demand obligations.

WASHINGTON - The municipal bond market and state and local governments could benefit more from the election of Democratic Sen. Barack Obama as president than his Republican opponent, Sen. John McCain, according to an analysis of their tax, economic recovery and other proposals, as well as interviews with market participants and economists.

WASHINGTON - The Washington Metropolitan Area Transit Authority sought court action yesterday to prevent it from having to make a $43 million termination payment on a sale-leaseback deal guaranteed by American International Group Inc. Meanwhile, House committee leaders pushed for federal assistance for more than 30 of the nation's largest transit agencies "at risk of default and financial collapse" because of similar deals.

BRADENTON, Fla. - Alabama on Tuesday filed a complaint in federal court asking a judge to void a swaption the Alabama Public School and College Authority entered into in 2002 and 2003 with JPMorgan.

WASHINGTON - Wall Street's leading industry group this week cut its staff by about 20%, or roughly 40 people, including a lobbyist who worked on municipal bond issues, in response to the financial crisis that has thinned its membership and cut into its revenues.

The Securities Industry and Financial Markets Association elected new members to its board of directors yesterday and re-elected two executives from regional firms with municipal bond businesses.

As liquidity for municipal issuers remains scarce in the short-term market, a regional broker-dealer group and an organization representing nonprofit student loan lenders are urging the Treasury Department to provide standby liquidity facilities for issuers still trying to convert from auction-rate securities to variable-rate demand obligations.

BRADENTON, Fla. - Bond insurance policies do not promise to maintain investment-grade ratings, nor do the policies promise that insurers won't participate in transactions that jeopardize ratings, Financial Guaranty Insurance Co. and Syncora Guarantee Inc. said in a court brief filed Monday.

WASHINGTON - Fannie Mae and Freddie Mac must resume their purchases of tax-exempt housing bonds to jump-start that virtually dead market so state and local housing agencies can utilize $11 billion of additional private-activity bond volume cap that Congress provided earlier this year, local government and housing groups warned federal regulators and lawmakers.

The municipal market should not be excluded from the federal government's efforts to resolve the financial crisis, the Municipal Securities Rulemaking Board's new chairman told representatives of the securities industry gathered in New York City yesterday.

DALLAS - Bryan, Tex., one of four cities that make up the Texas Municipal Power Agency, has filed a flurry of legal challenges to a $1.7 billion refinancing plan, claiming that the TMPA cannot obligate the city to more debt without its approval.

While Jefferson County, Ala., works to extend forbearance agreements that expire Friday, the county’s trustee has said that defaults have occurred on the county’s sewer debt.

WASHINGTON - The Treasury Department must take the place of American International Group Inc. as guarantor of transit agency sale-leaseback deals to avoid "financial disaster" for state and local governments, a group of lawmakers warned Treasury and Federal Reserve officials yesterday.

WASHINGTON - The Municipal Securities Rulemaking Board plans to "get into the ballgame" and encourage federal regulators to address liquidity concerns in the municipal market as part of their response to the credit crisis, MSRB chairman Ron Stack said yesterday.

The municipal bond division of the Securities Industry and Financial Markets Association plans to present Robert Foran, interim executive director of SIFMA's Foundation for Investor Education, and Dan Keating, chief operating officer at Samuel A. Ramirez & Co., with honor roll awards at a luncheon in New York today.

BRADENTON, Fla. - Jefferson County, Ala.'s counterclaims seeking a jury trial and more than $100 million in damages against Financial Guaranty Insurance Co. and Syncora Guarantee Inc. should not be dismissed, the county's attorneys said in a 23-page brief filed in federal court Thursday.