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Enhancing The Security Behind Municipal Obligations: Flushing And U.S. Trust Lead The Way, Kenneth W. Bond

Fordham Urban Law Journal

When bond counsel' render their legal opinion approving the issuance and delivery of a municipal obligation, one of the opinions traditionally expressed is that the obligation is "valid and legally binding according to its terms." Significant, here, are the words "valid" and "binding." The validity of a municipal obligation can usually be determined by straightforward observation. Bond counsel must be satisfied that (1) the issuer has statutory and sometimes constitutional authority to borrow and incur indebtedness (2) the funds borrowed are to be used for a public purpose and (3) the issuer has complied with the preconditions to issuing debt …