What the Volcker Rule Means for the Municipal Market. 12th Annual Tax & Securities Law Institute. Getting Creative on Public Workers’ Health-Care Costs. District Court Rebukes IRS Church Plan Rulings. Market Groups Agree: Proposed Issue Price Rules Unworkable. NAIPFA Issues MA Rule Guide; GFOA to Offer Training. Banks to Revamp Leveraged Muni Funds After Volcker
Quick Program Note: We’ll be taking next week off, but will wrap up the year with a double issue on 12/31. For you last-minute shoppers, please bear in mind that a subscription to Bond Case Briefs would make …. a truly terrible gift. MSRB Enhances Protections for Investors Against Unexpected Changes to Bond Authorizing Documents.
Judge Blocks Auction-Rate Arbitration against Goldman. WSJ: Borrowing Maneuver Catches Flak. State Treasurer Cites Potential Adverse Effects of Proposed Regs on Arbitrage Restrictions. Bank of America Settles Municipal Bond Rigging Lawsuit. NYT: Pension Ruling in Detroit Echoes West to California. Fitch & Moody’s U.S. Public Finance Teleconferences. NYT: Playing Pension Games. WSJ: Volcker Rule Could
Expedia, Inc. v. City of New York Dept. of Finance – Court upholds constitutionality of expansion of city’s tax on hotel occupants to include fees earned by online travel companies. Internatl. Bhd. of Elec. Workers Local Union No. 8 v. Bd. of Defiance Cty. Commrs. – Appeals court concludes that federal funds were used in
IRS LTR: Nonprofit’s Income Is Exempt as Exercise of Essential Government Function. NABL Says IRS Ruling Having Chilling Effect on Bonds. IRS LTR: Lease Arrangement in Bond-Financed Project Doesn’t Give Rise to Security Interest. MSRB Provides Education for Issuers on Disclosure of Bond Ballot Campaign Contributions. SIFMA: US Municipal Bond Credit Report, 2013 Q3. L.A.
Washoe-Mill Apartments v. U.S. Bank Nat. Ass’n – Pursuant to the Trust Indenture, and Section 11(b) of the United States Housing Act of 1937, court finds that HUD was entitled to funds remaining in trust account after bonds issued to fund a HUD-subsidized facility were redeemed. City of College Station, Tex. v. Star Ins. Co.
O’Brien v. New York State Com’r of Educ., in which the appeals court concluded that – for the purpose of calculating a school district’s constitutional and statutory debt limit – indebtedness is not incurred until the authorized bonds are actually sold, i.e., issued, rather than on the date the bonds are authorized. Elizabeth River Crossings
Stifel, Nicolaus & Co., Inc. v. Lac du Flambeau Band of Lake Superior Chippewa Indians, in which the District Court juggled complex jurisdictional issues in litigation following Indian tribe’s repudiation of a bond issuance; District Court concludes that it has jurisdiction and schedules hearing to determine if tribe would be enjoined from continuing to pursue
Willow Bend Estates, LLC v. Humphreys County Bd. of Sup’rs, in which the Supreme Court of Mississippi held that Mississippi Code Section 27–35–50(4)(d) – requiring local tax assessors to use the “actual net income” methodology rather than the “cost” methodology – prohibits local governments from including the value of federal tax credits in their valuation
The good folks at Baker Donelson have kindly provided us with the entire Order Granting Indenture’s MSJ from their win in In re Memorial Corrections, LLC, which we covered last week. The pdf is appended to the case brief. Should you encounter items that may be of interest to the BCB community, please feel free
In re Municipal Corrections, LLC, in which the District Court concluded that an unrecorded Indenture gave the Bond Trustee a mortgage on the real property pledged as security and that the mortgage was enforceable against a bona fide purchaser under principles of constructive and inquiry notice that apply under Georgia law. Turner County v. City
IRS Lists Factors for Determining if Entity Is an Instrumentality of State or Local Government. Shutdown Halts Rebates on Build America Bonds, Dents Appeal. California City Prevails Against Investor Lawsuit. NABL Teleconference: Ethical Lessons for Bond Counsel of the GIC Bid-Rigging Trials and Settlement. GASB Fact Sheet on Statement 34. MSRB Publishes First Report on
In re Allstate Life Ins. Co. Litigation, in which bond counsel was granted summary judgment on most claims brought against it in complex litigation following failed bond issuance; although it may ultimately be liable for failing to harmonize development agreement and indenture, resulting in inconsistency regarding which party was to hold an escrow account, thus
It’s been a busy week, folks, so pay attention. On the regulatory side, the SEC adopted final Muni Advisor Rules and the MSRB filed proposed rule changes to MSRB Rule G-11 on Bondholder Consents. We highly recommend that you take a look at each of the articles contained in the Regulatory section of this week’s
IRS Issues Proposed Regs on Arbitrage Restrictions on Tax-Exempt Bonds. IRS Issues Proposed Regs on Arbitrage Rebate Overpayments on Tax-Exempt Bonds. IRS Releases Proposed Issue Price Rules, Draws Concerns. SIFMA and GFOA Submit Comments to SEC Regarding Proposal to Amend MSRB Rules G-8, G-11 and G-32 in regards to Retail Order Periods. WSJ: Bond Lawyers
Oppenheimer AMT-Free Municipals v. ACA Financial Guar. Corp., in which the appeals court held that the cancellation and replacement of bonds in connection with an issuer’s bankruptcy proceedings did not relieve bond insurer of its obligation to make payments in any subsequent default. MSRB Files Revised Amendments to MSRB Rules on Retail Order Periods with
People ex rel. Cuomo v. Charles Schwab & Co., Inc., in which the court held that the AG had a) sufficiently stated a claim under the Martin Act, and b) sufficiently pled a nexus with New York, in an enforcement action against registered securities broker-dealer, alleging that broker-dealer engaged in fraudulent and deceptive conduct in
MSRB Provides Guidance for State and Local Governments When Hiring Municipal Advisors. SIFMA US Research Quarterly, 2013 Q2. FINRA Fines Morgan Stanley $1M for Unfair Pricing. FINRA Fines Four Firms, Two Individuals $270,000 For Muni Violations. IRS: Comments Sought on Regs on Standards for State, Local Bond Opinions. Help Your Clients Avoid the Next Detroit:
IRS: Community Development District Doesn’t Qualify as Political Subdivision. MSRB Publishes Updated and Enhanced Online Glossary of Municipal Securities Terms. Bond Dealers of America Bankruptcy Paper: Detroit May Be “Game Changer.” TEB Phone Forum: Monitoring Post-Issuance Compliance. Moody’s Proposes More Focus on Public Pension Obligations in Bond Ratings. Borough of Seaside Park v. Commissioner of
Hey folks, it’s come to my attention that typographical errors have been popping up when the HTML newsletter is opened in certain programs. We apologize and are working to identify and fix the problem. IRS May Make New Jersey Authority’s Municipal Bonds Taxable Because of Total Return Swap. MSRB Publishes New Guidance and Educational Resources
SEC Charges School District and Muni Bond Underwriter in Indiana with Defrauding Investors. TIGTA Finds Potential for Fraudulent Bond Tax Credit Claims. SIFMA US Municipal Bond Credit Report, 2013 Q2. MSRB Seeks Input on Potential Enhancements to Price Transparency in the Municipal Market. WSJ: Search for Muni-Bond Guidepost Sputters. U.S. Bank Nat. Ass’n v. Wright
Commission Charges City of Miami and Former Budget Director with Municipal Bond Offering Fraud. Miami Case Shows SEC Increasingly Targeting Individuals; Willing to Fine Cities. SIFMA Proposes ‘Execution With Diligence’ Standard for Municipal Trading. IRS LTR: Loan Sale Won’t Cause State Agency to Be Treated as Taxable Mortgage Pool. The IRS ruled that a state
MSRB Provides State and Local Governments with Tool to Improve Disclosure of Financial Information. This service allows state and local governments to schedule automated email reminders about an approaching deadline for providing annual and quarterly financial disclosures. Marysville Exempted Village Local School Dist. Bd. of Edn. v. Union Cty. Bd. of Revision, in which the
Bluebonnet Hotel Ventures, LLC v. Wachovia Bank, N.A., in which the court declined to rescind interest rate swap contract – entered into by developer at bank’s suggestion – in connection with bond issuance, finding that swap was not contingent upon extension of letter of credit by bank, which was never executed. Kane v. Township of
Los Angeles Unified School District v. County of Los Angeles, in which the court held that the share of a school district’s property tax revenue that was diverted from Educational Revenue Augmentation Funds (ERAF) by virtue of the Triple Flip and Vehicle Licensing Fee Swap legislation is to be counted as ERAF revenue in calculating
Hilgers v. Jefferson County, in which the court held that a County’s power to set sewer-service charges, etc. was not limited to only that portion of those charges that arose from the repayment of the bonds issued pursuant to the Amendment to State constitution that provided county could incur bonded indebtedness exceeding the then 3.5%
Sherman v. City of Atlanta, in which the Supreme Court of Georgia held that the trial court was required to determine objectors’ standing before addressing merits of objections in bond validation hearing and that attorney proffers were insufficient to establish objectors’ standing; greatest case name ever! Land of Lincoln Goodwill Industries, Inc. v. PNC Financial
In re Allstate Life Ins. Co. Litigation, in which the district court found that underwriters’ counsel spent enough time reviewing and editing the POS in a bond sale that a trier of fact could find that it had actual knowledge of the misstatements contained in the POS, thus giving rise to a duty to disclose,
In a precedent-setting decision that could have major ramifications for issuers, the IRS has ruled that a Florida Community Development District is not a political subdivision that can issue tax-exempt bonds. Panelists at a GFOA conference warned issuers to be wary of dealer contracts that might violate municipal securities rules and to make sure they
SEC, FINRA Probing Dealers Over Issuers’ Continuing Disclosure Compliance. WSJ: South Miami Charged With Defrauding Bond Investors and SEC Charges City of South Miami with Defrauding Investors About Tax-Exempt Status of Municipal Bonds. See also, Reuters: Wielding Harrisburg Example, SEC Cajoles Cities Nationwide. In re Jerome Markowitz Trust, in which the Superior Court of Pennsylvania
Raymond James Financial Services, Inc. v. Phillips, in which the Supreme Court of Florida held that state statutes of limitations apply to securities arbitrations. This article discusses the potential implication of this decision. Woman’s Hosp. Foundation v. National Public Finance Guarantee Corp., in which a Louisiana court of appeals upheld a bond insurer’s contractual right
City of Riverside v. Inland Empire Patients Health and Wellness Center, Inc., in which the Supreme Court of California held that Compassionate Use Act and Medical Marijuana Program Act do not preempt local bans on medical marijuana dispensaries. Sherman v. Development Authority of Fulton Count, in which the validation of a bond transaction leasehold estate
The SEC has charged the City of Harrisburg, Pa., with securities fraud for its misleading public statements when its financial condition was deteriorating and financial information available to municipal bond investors was either incomplete or outdated. SIFMA, as part of the Bank Loan Disclosure Task Force, has released a white paper regarding voluntary secondary market
Webb v. First Tennessee Brokerage, Inc., in which the court held that a purchaser of Lehman Brothers bonds was not required to arbitrate dispute with broker; cautionary tale for brokerage firm clients. Wall Street Journal article on an investment firm specializing in distressed municipal debt. IRS announces new Exempt Organizations Workshops focusing on changes to
April 23, 2013 – Issue 16
First Arkansas Bank & Trust, Trustee v. Gill Elrod Ragon Owen & Sherman, P.A., in which the Supreme Court of Arkansas discusses the liability of issuer’s counsel to purchasers in bond offering, finding: 1) no liability under state securities act; 2) no relationship giving rise to a duty under contract, negligence, or breach of a
April 17, 2013 – Issue 15
You may find the following items in this issue of particular interest: Kaplan v. Shanahan, in which the court affirmed an arbitration award in which the prevailing party was awarded attorneys’ fees, as the parties had agreed to be bound by FINRA arbitration rules, which permit such fees. State v. McElroy, in which a city
April 10, 2013 – Issue 14
You may find the following items in this issue of particular interest: Wells Fargo Advantage Nat. Tax Fee Fund v. Helicon Associates, Inc., in which the appeals court reversed summary judgment in favor of a law firm on securities law and negligent representation allegations in connection with a bond issuance for which the firm served
April 4, 2013 – Issue 13
You may find the following items in this issue of particular interest: In re Blue Ridge Housing of Bakersville LLC, in which a North Carolina court held that a nonprofit organization was the “owner” of low income housing development, and thus development entitled to property tax exemption, even though nonprofit had only a 0.1% legal
March 13, 2013 – Issue 10
You may find the following items in this issue of particular interest: Borikas, et al. v. Alameda Unified School District, in which a California appeals court found that that parcel tax’s residential/commercial property classifications and differential tax burdens based on property size exceeded the school district’s taxing authority. Northglenn Urban Renewal Authority v. Gil Reyes,