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A few thoughts on Tuesday’s oral arguments before the U.S. Supreme Court in the litigation over whether Puerto Rico’s Public Corporations Debt Enforcement and Recovery Act, an insolvency statute for certain of its government instrumentalities, is void, as the lower federal courts held, under Section 903 of the U.S. Bankruptcy Code.
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Statutory Liens vs. Consensual Liens: Why it Matters and When it may Not

March 20, 2016 | Blog | By Leonard Weiser-Varon

While secured creditors are entitled to special rights in bankruptcy, those rights may differ depending on whether creditors have a statutory or consensual lien on their collateral.
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A draft of the U.S. Treasury's proposed debt restructuring legislation began circulating earlier today.  The draft legislation would give Puerto Rico, as well as other U.S. territories, and their municipalities access to U.S. bankruptcy court under a new chapter of the U.S. Bankruptcy Code (so-called "Super Chapter 9").
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Que Certa, Certa: Supreme Court Creates Uncertainty with "Cert" Review of Puerto Rico Recovery Act

December 8, 2015 | Blog | By Leonard Weiser-Varon, William Kannel, Eric Blythe

It is said that muddy water is best cleared by leaving it be.  The Supreme Court’s December 4 decision to review the legality of Puerto Rico’s local bankruptcy law, the Recovery Act, despite a well-reasoned First Circuit Court of Appeals opinion affirming the U.S. District Court in San Juan’s decision voiding the Recovery Act.
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The Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE Act), one of the few recent examples of bipartisan cooperation on a new category of tax and budget expenditure, is both well-intentioned in its principles and cumbersome in its details, another example of the proposition that a camel is a horse designed by a committee. 
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Helpful News from IRS on Student Loan Bonds

November 19, 2015 | Blog | By Leonard Weiser-Varon, Maxwell Solet

On November 13, the IRS issued Notice 2015-78, providing favorable guidance on topics of interest to providers of “supplemental” or “alternative” student loans financed with tax-exempt bonds and to underwriters of such student loan bonds.
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We are delighted and proud to share the news that our colleague Meghan Burke has been selected to receive the Freda Johnson Award for Trailblazing Women in Public Finance at the Bond Buyer's Deal of the Year ceremony in New York on December 3rd.
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Can Alphabet Soup Fix Puerto Rico’s Debt Service Issues?

September 28, 2015 | Blog | By Leonard Weiser-Varon, William Kannel

Last week, the Working Group for the Fiscal and Economic Recovery of Puerto Rico gave the broadest hint yet of the next tactic in Puerto Rico’s ongoing quest to deleverage itself.
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The IRS’s recently-published proposed regulations for Section 529A qualified ABLE programs have taken some wind out of the sails of state program administrators and potential program managers who had hoped for regulations that hewed closer to the requirements in effect for qualified tuition programs under Section 529, on which Section 529A was based. 
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IRS Revamps Proposed Issue Price Definition for Municipal Bonds

June 23, 2015 | Blog | By Leonard Weiser-Varon, Maxwell Solet, Christie Martin

Treasury and IRS today announced a decision to withdraw the much-criticized portion of the notice of proposed rulemaking published in the Federal Register on September 16, 2013 (the “2013 Proposed Regulations”) related to the definition of issue price for tax-advantaged obligations and to propose a revised definition of issue price in its place.
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IRS's Proposed Section 529A Regulations for ABLE Programs: A Mixed Bag

June 19, 2015 | Blog | By Leonard Weiser-Varon

The IRS today published, right on deadline, its proposed regulations relating to Section 529A state-sponsored “qualified ABLE programs,” under which  tax-advantaged investment accounts may be established to fund future “qualified disability expenses” of eligible disabled individuals.
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First Circuit Hears Oral Arguments on Validity of Puerto Rico's Recovery Act

May 6, 2015 | Blog | By Leonard Weiser-Varon, William Kannel

A few reactions to today’s oral arguments before the U.S. Court of Appeals for the First Circuit regarding the validity of Puerto Rico’s Recovery Act.
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IRS Green Lights Section 529A ABLE Disability Programs

March 15, 2015 | Blog | By Leonard Weiser-Varon

Pi Day comes but once a century, on 3/14/15. The Internal Revenue Service receives praise approximately as frequently. But the IRS deserves applause for its Notice 2015-18, released March 10, 2015, giving the green light to states to proceed with the establishment of tax-free investment programs for the disabled under new Section 529A of the Internal Revenue Code.
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Puerto Rico’s Recovery Act Ruled Preempted: What Now?

February 8, 2015 | Blog | By Leonard Weiser-Varon, William Kannel

A similar question can be asked now that the federal district court in Puerto Rico has struck down the Puerto Rico Public Corporation Debt Enforcement and Recovery Act.
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Who is “Disabled” under ABLE?

January 19, 2015 | Blog | By Leonard Weiser-Varon

The recently-enacted federal ABLE statute provides a long-awaited vehicle for tax-exempt investing to meet future disability-related expenses of disabled individuals.
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Off-Key BABs: IRS Hits Wrong Note in Reissuance Analysis

December 30, 2014 | Blog | By Leonard Weiser-Varon

The IRS recently published a December 9, 2014 Chief Counsel Advice Memorandum to the effect that the defeasance of taxable Build America Bonds (BABs) causes a tax reissuance of the bonds, with the consequence that the municipal issuer ceases to be eligible for federal government interest subsidies for the period from the defeasance date to the redemption date. 
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In the aftermath of recent municipal bankruptcies in which issuers proposed and/or implemented bankruptcy plans involving partial discharges of the issuer’s payment obligation on insured bonds, there has been increased focus on whether municipal bond interest paid by a bond insurer after the bankruptcy plan's effective date continues to be tax-exempt.
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On December 16, 2014 the U.S. Senate approved the Achieving a Better Life Experience (“ABLE”) legislation previously approved by the House, authorizing state-sponsored tax-exempt savings programs for disability-related expenses.
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The U.S. Securities and Exchange Commission recently settled the first securities fraud charges brought against a municipal official alleging “control person” status under the federal securities laws. 
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IRS Provides Increased Flexibility on Management Contracts for Tax-Exempt Bond-Financed Property

November 7, 2014 | Blog | By Leonard Weiser-Varon, Maxwell Solet

On October 24, 2014, the IRS issued Notice 2014-67 (the “Notice”), which provides important guidance and increased flexibility for issuers and conduit borrowers of tax-exempt bonds regarding contracting with private parties in a manner that avoids “private use” by such parties of bond-financed facilities.
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