Jefferson County in Alabama May Vote to File Largest Bankruptcy July 28

Tuesday, August 2, 2011
By Paul Martin

By Martin Z. Braun

Jefferson County, Alabama, may decide this week on filing a record U.S. municipal bankruptcy, according to a meeting notice from the county commission.
The five-member commission meeting on July 28 may also vote on extending a negotiating period with creditors on restructuring more than $3 billion of sewer bonds or a settlement, the notice said.
The meeting will come one day before the end of a 30-day “standstill period” in which the county and creditors led by JPMorgan Chase & Co. (JPM) agreed to pursue a settlement to end the more than three-year-old debt crisis.
The county, home to Birmingham and a population of more than 658,000, has struggled for more than three years in fiscal distress after a sewer-bond refinancing collapsed during the credit crisis. Its woes intensified when the state legislature refused to act after a court struck down an occupational tax in March. The tax generated about a quarter of the county’s general fund revenue and officials have put more than 500 employees on unpaid leave.

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