In Trenton today, Judge Paul Levy will decide whether to make permanent an order preventing trustees from performing their fiduciary responsibilities by foreclosing on Mutual Benefit Life Insurance Co.-backed housing projects.

The outcome of the Superior Court hearing will have a direct impact on bondholders of 44 tax-exempt issues guaranteed by Mutual Benefit. Many of the deals, totaling about $600 million, are in default, and language in the indentures requires the trustees to foreclose on the underlying properties to salvage whatever possible for bondholders.

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