- May 13, 2013
- Posted by: Richard Feinberg
- Category: News
The country’s largest municipal bankruptcy filing could be drawing to an end sooner than expected. Administrators of the Jefferson County, Alabama Chapter 9 filing are estimating their restructuring efforts to be completed by as early as this Christmas.
Flushing The Debt
The Jefferson County bankruptcy filing has been swirling the drain for quite some time after their initial filing in late 2011, over a record $3.14 billion in sewer debt. While the municipality had been struggling with finances for years, the costs of the updated sewer system put them over the edge of insolvency. After relying too heavily on bonds to fund the project, suffering a huge setback when $60 million was spent to clean up after a Hurricane in early 2011, they city simply buckled under the financial pressure.
The Jefferson County bankruptcy plan vote was not won over easily and there has been staunch opposition since the case entered court. However, a settlement with creditors is becoming more eminent each day as county officials and the presiding judge work towards a resolution. A confirmation hearing for the final restructuring plan is tentatively set for late October of this year, to which the activation of the plan could begin as soon as December 20, 2013. If the plan is successful the county could easy exit insolvency and regain a new source of revenue by 2015.