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Illinois Bonds Gain as Judge Denies Petition to Void Debt

  • Tillman, who sought to file lawsuit, says he plans to appeal
  • ‘Risk is taken off’ for bondholders, Belle Haven says
The Illinois State Capitol in Springfield, Illinois.

The Illinois State Capitol in Springfield, Illinois.

Photographer: Raymond Boyd/Michael Ochs Archives/Getty Images

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Illinois bonds rallied after a judge denied an effort by the head of a conservative think tank to invalidate more than $14 billion of debt issued by the worst-rated state.

Sangamon County Associate Judge Jack Davis late on Thursday rejected the petition filed by John Tillman, head of the Illinois Policy Institute, and backed by Warlander Asset Management, a New York-based hedge fund, that sought to “restrain and enjoin the disbursement of public funds,” according to court documents. Tillman had claimed that Illinois’s record pension bond sale in 2003 and debt issued in 2017 were deficit financing that violated the state constitution, which says bonds must be issued for “specific purposes.”