At long last, and in what will be the largest municipal bankruptcy in history, Jefferson County Alabama is poised to file bankruptcy, but only after county officials attempted to stick it to taxpayers one last time.
Please consider Alabamaâ€™s Jefferson County Hires Bankruptcy Lawyer Kenneth Klee and Firm
Jefferson County, Alabama, which may vote in two days to file a record U.S. municipal bankruptcy, hired attorneys who represented Orange County, California, when it sought protection from creditors in 1994.
County commissioners voted 5-0 today to retain Kenneth Klee and his Los Angeles firm Klee, Tuchin, Bogdanoff & Stern LLP. The commissioners have scheduled a July 28 meeting in which they may decide to seek bankruptcy protection, extend negotiations with creditors on restructuring more than $3 billion of sewer bonds or approve a settlement.
Creditors including JPMorgan Chase & Co. (JPM) and bond insurer Syncora Guarantee Inc. havenâ€™t responded to a county proposal to reduce its debt obligation to about $2 billion, while raising sewer rates by 8 percent for the next three years, commissioners said. The county will likely enter bankruptcy if creditors donâ€™t respond this week, they said.
â€œMy constituents are saying pull the trigger,â€ Commissioner Sandra Little Brown said at a meeting.
The county, home to Birmingham and more than 658,000 residents, has been under fiscal stress for more than three years after a sewer-bond refinancing collapsed during the credit crisis. Its woes intensified when the Legislature refused to act after a court struck down a local occupational tax in March. The tax generated about a quarter of Jeffersonâ€™s general-fund revenue, and losing it forced officials to put more than 500 employees on unpaid leave.