WASHINGTON -- The bankruptcy of California's Richmond Unified School District has opened the way for more school district bankruptcies and is raising some serious questions about the security of some state school certificates of participation, according to a report issued last week by John Nuveen & Co.

The most pressing question was raised in a petition brought by the California Teacher's Association before the Richmond bankruptcy court, which asked the judge to invalidate and cancel the district's $8.35 million of outstanding lease-backed certificates, to prevent teacher layoffs and salary reductions, the report says.

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