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Rep. John Conyers (D-Mich.) said yesterday that he will convene a forum next week to discuss legal and other implications stemming from Detroit’s bankruptcy filing, the Detroit Free Press reported yesterday. Radio host, author and Georgetown University professor Michael Eric Dyson will host the forum to be held at Fellowship Church on West Outer Drive in Detroit, at 6 p.m. on Sept. 6. Harvey Hollins III, director of Gov. Rick Snyder’s Office of Urban and Metropolitan Initiatives, is expected to be there, as is Wayne County Executive Robert Ficano and other local elected officials, clergy and civic leaders, including officers of the NAACP and the American Federation of State, County and Municipal Employees. Conyers said that the forum will “examine the full range of issues facing Detroit as a result of the bankruptcy filing, including the impact on pensions, the state of possible conflicts of interests and other issues raised by an unelected official making the filing, such as whether the filing was made in good faith.”

Municipal-bond prices have fallen further than other debt amid rising U.S. interest rates this summer, exacerbating investor jitters spurred by Detroit's record-setting bankruptcy filing, the Wall Street Journal reported today. Bonds from some financially troubled issuers, like Puerto Rico and Chicago, have been particularly hard hit. Debt from the Windy City, which was downgraded by Moody's Investors Service last month amid questions about its pension liabilities, now yield about 1.50 percentage points more than a municipal market benchmark, up from about one percentage point in early July, according to Dan Toboja, senior vice president in fixed-income trading at investment bank and broker-dealer B.C. Ziegler & Co. in Chicago. Higher yields indicate lower prices. Yields on investment-grade municipal bonds have risen to almost the same as similarly rated corporate bonds. That is a rare occurrence, considering municipal bonds have lower default rates and the interest is generally tax free. As of Tuesday, yields on corporate bonds were 3.37 percent and yields on municipal bonds were 3.33 percent, according to investment-grade indexes from Barclays. Typically, municipal bonds yield about 25 percent less than corporate bonds. Debt prices in general have weakened since May. The Federal Reserve has discussed slowing its easy-money policies as the economy improves, prompting long-term bond yields to increase.

Bankruptcy Judge Meredith Jury granted bankruptcy protection to the California city of San Bernardino, paving the way for a precedent-setting battle between bondholders and California's giant public pension system, Reuters reported yesterday. Judge Jury ruled that San Bernardino was eligible for chapter 9 bankruptcy protection despite opposition by the California Public Employees' Retirement System (CalPERS). The $260 billion pension fund is the city's biggest creditor and America's largest pension fund. San Bernardino, a city of 210,000 located 60 miles east of Los Angeles, filed for bankruptcy protection in August 2012, citing a $46 million deficit and arguing that it had effectively run out of cash to meet its daily obligations.

Cash-strapped Detroit can continue to access an estimated $11 million a month in casino tax revenue, Bankruptcy Judge Steven Rhodes ruled yesterday, while the court takes up a deal with creditors related to the revenue, Reuters reported yesterday. Judge Rhodes ruled that bond insurer Syncora Guarantee Inc. cannot block the city from using taxes paid by the city's three casinos. Judge Rhodes said that Syncora does not have a lien on the money used as collateral since 2009 to secure Detroit's obligations on interest-rate swap agreements. Detroit entered into those agreements in conjunction with the sale of pension debt for its two retirement funds.

San Bernardino, Calif.’s bankruptcy judge chose an unusual way to help decide whether the city should enjoy her court’s protection from creditors while it renegotiates debts, Bloomberg News reported today. Instead of scheduling a multi-day trial with platoons of attorneys, a parade of witnesses and boxes of evidence, Bankruptcy Judge Meredith M. Jury will give a handful of lawyers a few hours today in her courtroom to debate the city’s eligibility to file under the U.S. Bankruptcy Code’s chapter 9. Judge Jury is streamlining the approach taken in the four other large municipal bankruptcies filed since 1998, those of Vallejo and Stockton, Calif., Jefferson County, Alabama; and most recently Detroit, which last month filed the largest ever chapter 9 case. Detroit is on track for an eligibility hearing in October, while Vallejo, Stockton and Jefferson County needed only weeks or months to convince judges they qualified for protection. San Bernardino, on the other hand, has waited more than a year to reach this stage. The San Bernardino case has been mired in court fights pitting the city against its creditors and the creditors against each other.

Detroit's bankruptcy judge has set a September court hearing for dozens of Michigan residents to voice opposition to the city's bankruptcy, but warned that a popular argument—that bankruptcy violates the state's constitution—won't persuade him to throw out the case at this point, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Steven Rhodes named 90 individuals who will get three minutes each to argue for the city's bankruptcy to be dismissed at a Sept. 19 hearing. But in his 11-page order filed to the U.S. Bankruptcy Court in Detroit, he said that many of the arguments against the case have improperly focused on whether Emergency Manager Kevyn Orr's bankruptcy exit plan for the city would involve cutting back on the $3.5 billion worth of pension promises that city officials have made to more than 23,000 retired workers, firefighters and police.

Detroit’s bankruptcy judge will hear some legal arguments one month earlier than planned about why the record-setting, $18 billion case should be thrown out, Bloomberg News reported yesterday. Bankruptcy Judge Steven Rhodes will also block objections related to any potential cuts to city-worker pensions until later on in the case, saying that fight should wait until a plan to adjust the city’s debt has been filed. Any objections to the city’s bankruptcy that don’t involve a dispute over facts, only the interpretation of legal issues raised by creditors, will be heard on Sept. 18 in federal court in Detroit, Judge Rhodes said in an order released yesterday. The original hearing on eligibility, set for Oct. 23, will remain unchanged and will be reserved for disputes over facts.

The receiver for Harrisburg, the insolvent capital of Pennsylvania, said he agreed to a plan with creditors owed about $362.5 million to end the city’s fiscal crisis without the need for another bankruptcy filing, Bloomberg News reported yesterday. The city would sell its waste-to-energy plant and lease its parking system, the state-appointed receiver, William B. Lynch, said yesterday in a copy of his plan sent to reporters and filed with Pennsylvania’s Commonwealth Court. The amount raised by the sale and the lease wouldn’t fully repay the claims of Harrisburg’s largest creditors. They might receive more funds later, according to the plan. Municipal workers also agreed to make concessions.

Detroit’s lead bankruptcy mediator ordered the city and bond-insurer Syncora Guarantee Inc. into talks in their dispute over a proposed $253 million swaps settlement, Bloomberg News reported yesterday. The city is seeking to buy its way out of an interest-rate swaps contract to save about $50 million a year, a proposal that Syncora asked a bankruptcy judge to reject when it comes before the court next month. The mediator in the case, U.S. District Judge Gerald Rosen, ordered Syncora, the city and swaps holders including Merrill Lynch Capital Services Inc. to meet with a bankruptcy judge from Oregon to try to settle their differences. After Detroit filed the biggest-ever U.S. municipal bankruptcy last month, the city’s emergency manager, Kevyn Orr, asked the judge overseeing the $18 billion case to approve the settlement with Merrill Lynch and UBS AG. Syncora, which sold insurance on the swaps, opposes the settlement, claiming that ending the contract too early could hurt its economic interests.

Jefferson County, Ala., said that it may offer sewer-system creditors new bonds at “much lower” principal amounts if they fail to revise a bankruptcy exit plan that’s threatened by rising interest rates, Bloomberg News reported yesterday. Without concessions, creditors — including JPMorgan Chase & Co, hedge funds and bond insurers — won’t get cash for the $3 billion in debt they hold, according to Ken Klee, the county’s bankruptcy attorney. Instead, they would have to accept a debt exchange and have bankruptcy expenses paid out of sewer revenue, reducing the amount available for repayment, he said. On June 5, Jefferson County reached an agreement to pay its largest creditors $1.84 billion, or 60 percent of what they’re owed. Since then, interest rates on top-rated 30-year municipal bonds have jumped by 1.3 percentage points to 4.67 percent, according to data compiled by Bloomberg. At current rates, the county could refinance only $1.5 billion to $1.6 billion of sewer debt, Klee said.