Quote:
Originally Posted by villagerjack
"The warranty of tax exemption is standard and is intended to put the cost on the issuer in exactly this kind of situation. That is how the system works."
Is this carved in stone? If so, Where? The bonds WERE tax exempt when issued. How could anyone guarantee tax exemption forever if it was still an IRS open item? If this is thecase then the M/V of these bonds wouldnot have dropped after this latest pronouncement. Do you know if it did ?
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Think of the warranty on your car. It is intended to protect you, the buyer, if anything goes wrong with the car. If a wheel falls off during the warranty period, it doesn't matter if the manufacturer put the wheel on in good faith. When he gave you the warranty, he assumed responsibility if anything went wrong with the car. Same principle here.
Frankly, as a Villager, I would rather see the bond holders, as opposed to the Center Districts, take the ultimate hit, but, whatever you may think, it just simply is not going to happen-- although the bond holders may take a loss for reasons I am not going to get into.
By the way, although I have not followed the price of the relevant bonds, of course it dropped. The bond holders may have some difficulty in getting paid and also some tax problems as a result of the latest IRS ruling.