To subscribe to Capitol Fax, click here. *** UPDATED x6 *** Judge denies request to file taxpayer lawsuit over state bonds Thursday, Aug 29, 2019 * Breaking news from the Bond Buyer’s Illinois reporter… Order pic.twitter.com/l5VRca9wtc — yvette shields (@Yvette_BB) August 29, 2019 Judge notes hedge fund Warlander's financial interest in the litigation -identified at hearing as credit default swaps hedging IL bonds - but doesn't reference it otherwise in his order despite having heavily questioned plaintiff attorney about fund's position during hearing — Caitlin Devitt (@Caitlindevitt) August 29, 2019 Tillman/Warlander had argued that 2003 and 2017 bond deals violated specific purposes clause of constitution bc used to shore up general fund, but judge says in order that enabling statutes outlined specific purposes clearly. + — Caitlin Devitt (@Caitlindevitt) August 29, 2019

Background on the legal action is here, here, here and here. This post will be updated. *** UPDATE 1 *** Emily Bittner in the governor’s office… The administration is pleased that the judge repudiated this sham lawsuit brought on by the same far-right actors whose pathological desire to bankrupt the state brought us four years of devastation under Bruce Rauner. *** UPDATE 2 *** Comptroller Susana A. Mendoza… We’re very pleased that Judge Jack Davis did the right thing and threw out this completely frivolous ‘political stump speech’ of a lawsuit. Now that it is clear that Illinois Policy Institute CEO John Tillman and the Warlander hedge fund filed this phony lawsuit just to try to sabotage Illinois’ credit rating for personal financial gain and headlines, anyone who has supported the IPI in the past should rethink their support. Under the new leadership of Governor Pritzker and the steady resolve and financial stewardship of the Comptroller’s Office, the state of Illinois is fixing its finances and the bond rating agencies are recognizing this. *** UPDATE 3 *** Annie Thompson at the attorney general’s office… As we stated in our written submissions and oral argument, the plaintiffs waited nearly two decades after the first bonds were issued and billions of dollars were paid into the pension funds, and then waited several years after the second bonds were issued and payments were made on the backlog of bills owed to the state’s service providers and other vendors. The delay alone demonstrates that the petition was always without merit. We are pleased with the court’s decision to deny the plaintiffs leave to file a taxpayer action that, according to the court, “resembles far more of a political stump speech than it does a legal pleading” that “would result in an unjustified interference with the application of public funds.” *** UPDATE 4 *** The full order is here. *** UPDATE 5 *** John Tillman… “I strongly disagree with the Court’s decision, will appeal and am confident that I will prevail. It was premature for the Court to decide the case on the merits at the petition stage. Moreover, I disagree with the court’s conclusion that whether general obligation bonds have a specific purpose is a purely political question. The Illinois Supreme Court has ruled that the judiciary is in fact required to determine whether a challenged purpose is specific or not, and has done so on other occasions.” John Tillman took on the lawsuit as an independent individual and concerned citizen. It is not an organizational initiative of the Illinois Policy Institiute. *** UPDATE 6 *** Ted Hampton, Vice President and Senior Credit Officer of Moody’s… The judge’s ruling today denying a lawsuit that sought to invalidate some of Illinois’ general obligation debt is positive for the state and in line with our view that the plaintiffs’ argument lacked merit. However, an appeal by the plaintiffs could still complicate the state’s near-term debt issuance plans. - Posted by Rich Miller

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