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On August 11, Franklin Funds and Oppenheimer Rochester Funds filed a second amended complaint, opposition to motion to dismiss and cross-motion for summary judgment in the litigation they previously filed in the United States District Court for Puerto Rico challenging the constitutionality and validity of Puerto Rico’s so-called Recovery Act.
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Puerto Rico and PREPA Seek Dismissal of Bondholder Challenge to Territory's Bankruptcy Statute

July 22, 2014 | Blog | By Leonard Weiser-Varon, William Kannel

The Commonwealth of Puerto Rico and the Puerto Rico Electric Power Authority (PREPA) yesterday filed separate motions to dismiss the federal court complaint filed last month by some PREPA bondholders seeking to invalidate the recently-enacted Puerto Rico Public Corporation Debt Enforcement and Recovery Act.
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Be PREPAred: PREPA Bondholders Greet Puerto Rico's Bankruptcy Legislation With Federal Lawsuit

June 30, 2014 | Blog | By Leonard Weiser-Varon, William Kannel

On Saturday, June 28, Puerto Rico's Governor Padilla signed into effect Puerto Rico's new bankruptcy law for certain revenue bond issuers. 
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Puerto Rico Poised to Enact Bankruptcy-Like Legislation for Certain Revenue Bond Issuers

June 25, 2014 | Blog | By Leonard Weiser-Varon, William Kannel

Puerto Rico’s Governor Alejandro Garcia Padilla today introduced debt restructuring legislation which, upon enactment, would provide a judicial debt relief process in Puerto Rico’s courts for certain public corporations.
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The post on our securities litigation and compliance blog titled "SEC Steps Up Scrutiny of Municipal Bonds: Recently Filed Enforcement Actions"  surveys recent SEC enforcement actions against municipal bond issuers. 
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Last Tuesday, Puerto Rico sold its much-ballyhooed $3.5 billion in non-investment grade general obligation bonds. Two days later, two legislators in Puerto Rico’s Senate filed a bill which, if enacted, would permit insolvency filings by Puerto Rico’s public corporations in Puerto Rico's territorial trial court.
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Legal Highlights in Puerto Rico's "Draft POS" for Upcoming General Obligation Bond Issue

March 5, 2014 | Blog | By Leonard Weiser-Varon, William Kannel

Although Puerto Rico’s much-discussed sub-investment grade general obligation bond issue is not yet being marketed via an official preliminary official statement, it appears that a draft POS has been making the rounds. 
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Puerto Rico Senate Not in a New York State of Mind?

February 27, 2014 | Blog | By Leonard Weiser-Varon, William Kannel

As reported by the Wall Street Journal today and by other sources, the authorizing legislation for Puerto Rico’s much anticipated $3.5 billion non investment grade general obligation issue has become hung up in Puerto Rico’s Senate over language included in the bill passed by the territory's House of Representatives.
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After initially putting the brakes on the MSRB’s attempt to use underwriters of Section 529 college savings plans as its data-gathering team, the SEC has pressed the accelerator and approved an amended MSRB Rule G-45.
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Puerto Rico Bondholders Await Contract Impairment Ruling in Teacher Pension Reform Litigation

February 7, 2014 | Blog | By Leonard Weiser-Varon, William Kannel

We previously discussed the Puerto Rico Supreme Court’s decision in the Hernandez case, in which by a 5-4 vote the court upheld the constitutionality under federal and Puerto Rico law of pension reform legislation affecting public sector employees.
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Could Bondholders Bring Claims Against Puerto Rico Bond Issuers in Courts Outside Puerto Rico?

February 3, 2014 | Blog | By Leonard Weiser-Varon, William Kannel

As Puerto Rico prepares to access the public markets with a new bond issue, the Wall Street Journal reports that the list of demands from some potential investors include, in addition to a high interest rate and as much security as the issuer can provide, the issuer’s consent to the adjudication in the New York courts of any future disputes involving the applicable bonds.
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The Government Development Bank for Puerto Rico (GDB) hosted an unusual public conference call on October 31 to respond to legal questions raised by investors in bonds issued by the Puerto Rico Sales Tax Financing Corporation, better known by its Spanish acronym, COFINA.
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The IRS recently issued a private letter ruling, PLR 201310043 (released on March 8, 2013), of interest to Section 529 plans and their program managers. The ruling relates to the tax treatment of incentive contributions to 529 accounts and was issued in response to a ruling request by a financial services complex described as including a bank and broker.
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A recent ruling in the American Airlines bankruptcy case enforcing an automatic acceleration upon bankruptcy provision serves as a reminder that the enforceability of so-called ipso facto provisions in debt instruments remains an unsettled, forum-dependent question. 
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MSRB Proposes Rule G-47 on Time of Trade Disclosure Obligations

February 13, 2013 | Blog | By Leonard Weiser-Varon

MSRB Rule G-17 has been interpreted by the MSRB as requiring a broker or dealer (“broker”) to  disclose to its customer, at or prior to the time of trade of a municipal security, all material information about the transaction known by the broker, as well as material information about the security that is reasonably accessible to the market. 
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"28% Cap" Unlikely to Trigger Wave of Municipal Bond Tax Calls

January 8, 2013 | Blog | By Leonard Weiser-Varon

Market commenters have suggested that billions of dollars in municipal bonds may be subject to par redemptions if the much-discussed “28% cap” on the value of certain federal income tax deductions or exclusions is enacted and if the capped items include municipal bond interest.
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Michigan Emergency Manager Bill Signed Into Law

January 2, 2013 | Blog | By Leonard Weiser-Varon, William Kannel, Adrienne K. Walker

This is a follow up to our recent blog post discussing then pending Michigan legislation known as the “Local Financial Stability and Choice Act” or Public Act 436 (the “Financial Stability Act”), which will replace Public Act 72 and overhaul Michigan’s emergency manager law.
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Detroit's "Fiscal Cliff" and Michigan's Response

December 13, 2012 | Blog | By Leonard Weiser-Varon, William Kannel, Adrienne K. Walker

Detroit’s increasingly distressed financial condition has created a dynamic and rapidly evolving situation where the potential of a Chapter 9 filing appears to be the subject of renewed discussion and legislative attention. 
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Conflicts Disclosure and Acknowledgments in MSRB Rule G-17 Disclosure Letters

October 3, 2012 | Blog | By Leonard Weiser-Varon, Charles Carey

Since August 2, 2012, investment banking firms retained to act as underwriters on municipal finance transactions have been required to provide written disclosure to issuers concerning the relationship between issuers and underwriters.
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Special Revenue Decision Posted in Jefferson County Bankruptcy Case

June 29, 2012 | Blog | By Leonard Weiser-Varon

Please find today’s special revenue decision in the Jefferson County bankruptcy case.
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