- Alabama County Owes $3.14 Billion and Is Mulling Bankruptcy Protection After Bad Refi Deal
Alabama County Owes $3.14 Billion and Is Mulling Bankruptcy Protection After Bad Refi Deal
Posted Aug 12, 2011 4:11 PM CDT
By Stephanie Francis Ward
Jefferson County, Ala., commissioners are slated to vote today on whether the municipality should file for bankruptcy protection or proceed with legal action against JPMorgan Chase over a failed refinancing deal.
According to Bloomberg News, there’s an 80 percent chance the county will seek Chapter 9 protection.
The county owes $3.14 billion on sewer bonds from the failed refinancing deal. If the county of 660,000 decided to file for bankruptcy protection, it will be the largest Chapter 9 filing in U.S. municipal history.
There is also a settlement agreement on the table. Sandra Little Brown, a Jefferson County Commissioner, told Bloomberg that the agreement includes a stipulation that the county drop lawsuits against banks involved in the refinancing deal, and any future criminal prosecutions.
“The investigation needs to be ongoing,” Little Brown said. Banks “all over America have bad deals.”