Law and legal issues

BRADENTON, Fla. - The Jefferson County, Ala., Commission yesterday voted 3 to 2 against filing for bankruptcy.

CHICAGO - When General Motors Corp. last week lobbied Detroit's two pension funds to invest in its prominent downtown headquarters to help raise $500 million, some saw it as an illustration of the severity of the fiscal pressures facing the U.S. auto industry.

The Municipal Securities Rulemaking Board announced yesterday that it has tapped Janet Eakes, a former Freddie Mac senior vice president, for its newly created post of chief operating officer, and John Doyle, a principal in the municipal securities division of UBS Securities LLC, as director of project management.

CHICAGO - A Wright County, Minn., judge last week dismissed a lawsuit filed by Bridgewater Telephone Co. against the city of Monticello that argued its $26.4 million bond issue to fund the installation of a fiber-optic broadband communications network violated state law.

SAN FRANCISCO - With the deal slated to go before retail investors Tuesday, details remain scarce on the structure of California's planned $4 billion revenue anticipation note offering.

Three European governments yesterday agreed to take further measures to support Franco-Beligan bank Dexia SA, a top provider of credit enhancement in the U.S. municipal market and parent of bond insurer Financial Security Assurance Inc.

Outflows have continued to slow and more new cash has begun to find its way back to tax-exempt money market funds over the last week.

WASHINGTON - Municipal issuers are pushing to be included in the Federal Reserve's program to buy commercial paper, which the Fed has hinted will not include municipalities under its current terms. The resolution may ultimately boil down to the definition of a municipality, market participants contend.

BRADENTON, Fla. - In a tersely worded statement yesterday, Jefferson County Commission President Bettye Fine Collins criticized local legislators who oppose the plan negotiated by Alabama Gov. Bob Riley and the New York Insurance Department that would absolve the county of $1 billion of sewer debt and avoid filing the largest municipal bankruptcy in U.S. history

WASHINGTON - Michael F. Imhoff, a managing director at Stifel, Nicolaus & Co. in Denver, and Alan Murphy, senior vice president at Duncan-Williams Inc. in Memphis, have joined the Municipal Securities Rulemaking Board, the MSRB announced yesterday.

SAN FRANCISCO - California has issued a preliminary official statement for a $4 billion revenue anticipation note issue that it plans to price next week, amid continuing concerns over the market's ability to absorb such a deal during the ongoing credit crunch.

BRADENTON, Fla. - Behind the scenes for the past few weeks, officials at the New York Insurance Department intervened at the request of Alabama Gov. Bob Riley in the negotiations aimed at preventing Jefferson County from filing the largest municipal bankruptcy ever in the U.S.

Banc of America Securities LLC, Banc of America Investment Services Inc., and RBC Capital Markets Corp. have agreed to buy back at par a total of almost $5.6 billion of auction-rate securities from retail investors under preliminary settlements reached with federal and state regulators over charges they engaged in abusive ARS sales practices.

WASHINGTON - Connecticut Attorney General Richard Blumenthal has filed motions to remand back to state court the lawsuits he filed this summer against the three major credit rating agencies.

Money market mutual funds are expected to all participate in the Treasury Department's temporary guaranty program, which will cover investors' assets in the funds as of the end of Sept. 19, analysts said.

BRADENTON, Fla. - Alabama Gov. Bob Riley has asked the newly created Troubled Asset Relief Program within the Treasury Department to provide a backstop for Jefferson County's sewer debt restructuring plan.

WASHINGTON - The Federal Reserve announced yesterday that it will buy commercial paper directly from issuers to provide liquidity to the short-term market, prompting officials from Massachusetts and other states to say they may push to participate in the program.

The Securities and Exchange Commission has had to put its initiatives to improve municipal disclosure and accounting standards on the back burner because of the ongoing credit crisis, but still plans to propose changes to its disclosure regulations, the SEC's municipal securities chief said this week.

Washington - The Supreme Court heard arguments yesterday in a case that could determine whether tobacco companies may face new liabilities from smoker lawsuits filed over the alleged deceptive marketing of "light" cigarettes under state laws.

BRADENTON, Fla. - An analyst yesterday recommended that investors "be highly cautious in purchasing any bonds" issued by Alabama or its localities as two Jefferson County commissioners pushed once again to file what would be the largest municipal bankruptcy ever in the U.S.