* Yvette Shields at the Bond Buyer…
An Illinois judge acted properly when he dismissed a taxpayer complaint that challenged repayment of $14.3 billion of state general obligation bonds after concluding the case lacked legal merit, Illinois Attorney General Kwame Raoul’s office argues in an appellate filing.
“The circuit court’s judgment denying petitioner leave to proceed on his complaint should be affirmed because he failed to establish a reasonable ground to pursue his claim to enjoin further payments on the 2003 and 2017 bonds based on his theory that the laws authorizing them violated the State Debt Clause,” reads the brief filed Feb. 14 by Raoul’s office.
“That claim lacked merit for several reasons. And the circuit court was not required, as petitioner contends, to let his case go forward even if doing so was ultimately futile as a matter of law,” the brief continued.
The filing marked the latest salvo in the case watched closely by market participants that dates back to last summer when Illinois Policy Institute head John Tillman sought to file a lawsuit blocking repayment of the state’s $10 billion 2003 GO pension obligation issue and $6 billion 2017 GO bill backlog borrowing. About $14.3 billion remains outstanding.
Tillman, who as head of the conservative IPI is a frequent critic of state fiscal policies, argues the bonds violated the state constitution and therefore should be voided. A hedge fund that originally was named as a potential plaintiff is no longer named in any filings.
The attorney general’s brief is here.