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