JeffCo Bankruptcy: Court sets schedule while county waits on receiver’s next move
County lawyers promise a fight if the sewer receiver, John Young, attempts to raise sewer rates.
Jefferson County’s bankruptcy filing could come down to a distinction between a bond and a warrant, and maybe even the grammar of the Alabama Legislature.
While Jefferson County’s debt has been casually referred to as “bond” debt, all of the debt is, in fact, in warrants, not bonds. In Alabama bond debt requires approval in a public referendum and the bonds must be put out of bid. Warrants carry neither requirement.
Lawyers for the creditors argued Thursday that Alabama law only allows a municipality to file for bankruptcy only if it has bond debt, not warrants. The county would then be prohibited under Alabama law from filing for bankruptcy.
In 2009, Prichard, Ala., filed for Chapter 9 bankruptcy, but the courts rejected the filing because of the Alabama law. The city has appealed the decision to the Alabama Supreme Court, which has had the case for more than six months without rendering a decision.
United States Bankruptcy Judge Thomas Bennett said in court that the county meets all other eligibility requirements for Chapter 9, but witheld any decision regarding the state statutory question. Bennett asked both sides for input draft questions to give the Alabama Supreme Court.
Both sides have until Dec. 28 to submit their drafts.
Bankruptcy Reactions: Jefferson County sewer receiver, Gov. Bentley, Rep. Terri Sewell and more
Jefferson County sewer system receiver John Young called Jefferson County’s decision to file for bankruptcy a “catastrophic mistake,” and Alabama Gov. Robert Bentley said the bankruptcy is an “embarrassing situation.” Reactions from the Birmingham Business Alliance, Alabama Attorney General Luther Strange, and more.
Jefferson County Bankruptcy: Joe Knight
Jefferson County Commissioner Joe Knight explains the Commission’s decision to file for bankruptcy in Jefferson County.
Jefferson County Bankruptcy: Jimmie Stephens
Jefferson County Commissioner Jimmie Stephens speaks to the press about the Commission’s decision to seek approval for bankruptcy.
Jefferson County Bankruptcy: David Carrington
Commission President David Carrington discusses what lead him to vote for a Chapter 9 municipal bankruptcy filing and the impact it could have on the county, the region and the state.
Jefferson County Bankruptcy: Kenneth Klee
Jefferson County’s lead bankruptcy lawyer Kenneth Klee explains what to expect now that the county is filing for Chapter 9 bankruptcy.
Jefferson County votes to file for the largest municipal bankruptcy in U.S. history
Jefferson County’s Chapter 9 filing will be the largest in U.S. history, more than twice the Orange Co., Calif. filing. “I’m sorry, I feel like this has to be done,” Commission President David Carrington said.
Jefferson County could vote for bankruptcy Tuesday
Yes, again — the Jefferson County Commission could vote to file for federal bankruptcy tomorrow, at least the fourth such do-or-die date the commission has set this year.
Jefferson County punts again, no decision until next week
The Jefferson County Commission will meet on Friday, Aug. 12, to decide whether to declare bankruptcy or to accept a settlement with Wall Street. And this time, they say they mean it.
Hurry up and wait: Jefferson County delays bankruptcy meeting
The county and its creditors have agreed to a one-week extension of the “standstill period” to allow more time for negotiations.
