Octave Specialty Group Inc (OSG)

[Kurupt]

A few new articles regarding the delay popping up on google:

Nice to hear a few different perspectives...

Vallejo went belly up. San Diego, San Jose and other cities are on the verge–or already there but refuse to admit it. LA and San Fran are running up a one billion deficit over 3-4 years. This recovery can be found on the pages of the Chron, Times or Bee, but not in the real world where people live.

““The Hercules Redevelopment Agency, which as of February 1, 2012 no longer exists, went into technical default on its February 1 bond interest payment of approximately $2.4 million. The bond holders were paid because they are protected by bond insurance and a separate bond fund from which bond payments may also be drawn. The basic problem is that the Agency has no money and its fund balance is negative, even with the approximately $4.1 million in tax increment income received in December.”

This is a town in Contra Costa County. There are many towns in California in the same boat, they can not pay bonded indebtedness. The State has a $21 billion cash deficit and the Feds–well, they just print money.
The emperor is wearing no clothes, thought you should know.

Hercules Has Its Back to the Wall: Fears of Bankruptcy due to Lawsuit, RDA Dissolution, Debt
California City News, 2/14/12
Earlier this month, a weekly report from Hercules City Manager Steve Duran touched on the troubles the city is facing after several of its bond ratings were severely downgraded due to concerns about bankruptcy and insufficient funds to cover the city’s housing- and non-housing tax- allocation bonds (and property taxes coming later this year aren’t likely to cover an Aug. 1 debt payment). Simply put, Hercules did not have enough cash to make some of its Feb. 1 bond payments and had to rely on insurance coverage to meet its obligation, which led to a quick downgrade from one of the leading municipal credit rating agencies. Here is what CM Duran’s memo stated:
“The Hercules Redevelopment Agency, which as of February 1, 2012 no longer exists, went into technical default on its February 1 bond interest payment of approximately $2.4 million. The bond holders were paid because they are protected by bond insurance and a separate bond fund from which bond payments may also be drawn. The basic problem is that the Agency has no money and its fund balance is negative, even with the approximately $4.1 million in tax increment income received in December.

The Redevelopment Agency bond insurer, Ambac, filed suit in Superior Court in Martinez to force the City to immediately turn over $4.1 million to the Redevelopment Agency bond trustee and attach certain real property as security; but the court ruled against Ambac on Tuesday. A hearing is scheduled for February 21 on this matter; however, the City and Ambac are in negotiations to settle the disagreement.”
While the city hopes it can reach an agreement with Ambac, it’s likely Hercules will seek bankruptcy protection if it loses in court. In regards to the dispute with Ambac, the city contends it had little choice but to keep the funds due to concerns about bankruptcy.

In an interview with Patch, CM Duran stated, “The RDA is done [and] there’s a mess to clean up with this bomb that was thrown at us. At this point there’s not enough money to pay debt.”

An S&P analyst released the following statement about its decision to downgrade the city’s bonds: “The downgrade reflects our assessment of the agency’s use of the Ambac Assurance Corp. surety reserve to fund a $2.4 million debt service payment on Feb. 1. The outlook remains negative reflecting our expectation that pledged revenue will remain insufficient to cover non-housing debt service obligations and remaining surety reserve funds could be depleted in the next one to two years.”

Patch has a great rundown on how Hercules has ended up in its current predicament, see


http://capoliticalnews.com/2012/02/14/another-ca-city-facing-bankruptcy/