BIRMINGHAM, Alabama (Reuters) – Officials from Alabama’s Jefferson County met on Friday to decide whether to file for the largest municipal bankruptcy in U.S. history over a $3.14 billion bond debt or pursue a deal with creditors.
If the southern state’s most populous county opts for bankruptcy, it could rattle the $3.7 trillion U.S. municipal bond market. A Chapter Nine filing would surpass the one declared by Orange County, California, in 1994. Since the 2007-2009 recession, fears of such bankruptcies have worried investors.
, Aug 12 (Reuters) – Officials from
Alabama’s Jefferson County met on Friday to decide whether to
file for the largest municipal bankruptcy in U.S. history over
a $3.14 billion bond debt or pursue a deal with creditors.
The county’s five commissioners and its attorneys went into
executive session behind closed doors at 9 a.m. local time
(1400 GMT) to consider whether to accept a proposal by
creditors that include JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) on
restructuring and reducing the debt.
BIRMINGHAM, Alabama (Reuters) – Creditors made a fresh offer on Thursday to defuse a $3.14 billion bond debt crisis in Alabama’s Jefferson County and prevent the largest municipal bankruptcy in U.S. history.
Commissioner Joe Knight said the creditors, who include JP Morgan Chase, failed to agree to the figure set by the county for a reduction in its outstanding total debt in a potential sticking point to a deal.
ATLANTA (Reuters) – The new owner of the Atlanta Hawks said on Monday he would do all he could to bring an NBA championship to a city that has made the playoffs the last four years but never clinched the title.
Alex Meruelo reached a sale agreement for a majority ownership stake in the Hawks and the Philips Arena in downtown Atlanta that hosts the team. The deal is subject to approval by the NBA Board of Governors, and financial terms of the agreement were not disclosed.
Aug 4 (Reuters) – Alabama’s Jefferson
County extended talks over a $3.14 billion sewer bond debt on
Thursday in a bid to avert what would be the largest municipal
bankruptcy in U.S. history. The talks were "extremely fragile" and the one-week extension was to seek further concessions from creditors, said Jefferson County Commission President David Carrington at the end of a closed-door executive session in which the county could have filed for Chapter 9. "We have reviewed the creditors offer in exhaustive detail, point by point. We are working on a counter-offer to their proposal," Carrington told a commission meeting. He gave no details of the negotiations with creditors, who include JP Morgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz), but said the decision to extend came after an intervention from Governor Robert Bentley, who has taken an increasingly prominent role in the negotiations. "There were many good points within their proposal, but we feel it is prudent for us to give some minor adjustments and to give one final and best shot to solving this crisis," said finance commissioner Jimmie Stephens after the meeting. Had the county declared bankruptcy it would have been the second U.S. municipality this week to take the highly unusual step. The small city of Central Falls, Rhode Island, filed for Chapter 9 on Monday over an $80 million unfunded pension and retiree health benefit liability. Both places are in part casualties of the U.S. financial crisis as is Vallejo, California, which went bankrupt in 2008. The largest previous Chapter 9 filing was Orange County, California, in 1994. One issue dividing creditors and Jefferson County is how much the 660,000 county residents should pay in sewer rates, according to Stephens. Residents already pay some of the highest sewer rates in the country and some fear several years of steep increases might be part of a deal to refinance the debt. County commissioners say they will resist any steep rises. CORRUPTION, BAD DEALS Municipal bond markets are watching the county's situation closely and any move to bankruptcy could shake the $2.9 trillion market. It could also have major repercussions for Alabama because the county's largest city, Birmingham, is an economic engine for the state. The county's debt is rooted in corruption among local politicians and business leaders that has led to 22 convictions. It also stems from deals made with financial institutions that sold the county a disastrous series of bond swaps in the mid-2000s to refinance an upgrade to its sewer system. Interest on those swaps spiraled in 2008 when the bond market fell sharply, triggering the crisis. The county faces a separate shortfall in its general fund and general fund warrants totaling about $1 billion. Outside the Jefferson County courthouse where the meeting took place a handful of concerned ratepayers held up signs and demanded the commissioners pursue bankruptcy. "Flush JP Morgan down the toilet not ratepayers," one sign read. "The tragic thing is that people are the ones who end up paying for all the lying, thievery and cheating that the politicians have engaged in in the last few years," said Keith Mims, a salesman. If the county pursues Chapter 9 bankruptcy, it will not be exempt from its bond obligations, but would likely face a further period of talks with creditors over refinancing the debt, analysts and county leaders say. (Editing by Tom Brown; editing by Andre Grenon)
By Matthew Bigg and Melinda Dickinson
BIRMINGHAM, Ala.. (Reuters) – Alabama’s Jefferson County could decide on Thursday whether to accept an offer from creditors to settle its sewer debt or pursue what would be the largest municipal bankruptcy in U.S. history.
The county began a rare executive session at 1 p.m. (1800 GMT) and it was likely to last up to four hours, County Commission President David Carrington said before commissioners went into a closed session.
MARIETTA, Georgia (Reuters) – A U.S. woman convicted of vehicular homicide after her 4-year-old son was killed in a hit-and-run accident was sentenced Tuesday to 12 months probation rather than a potential jail term.
The case drew national attention because Raquel Nelson faced as much as three years in prison, far more than the six months served by the driver of the van who hit the boy and also injured Nelson and her daughter in April 2010.
ATLANTA (Reuters) – Alabama’s Jefferson County could decide on Thursday whether to settle its $3.2 billion sewer bond debt or pursue what would be the largest municipal bankruptcy in U.S. history.
The county commission called a special session for Thursday with agenda items including bankruptcy, a settlement and an extension of the 30-day “standstill” period established to pursue talks with creditors, who include JP Morgan Chase. That agreement is set to expire on Friday.
ATLANTA, July 22 (Reuters) – A U.S. district judge ordered
the arraignment of Agility (AGLT.KW: Quote, Profile, Research, Stock Buzz) in the latest step of the
prosecution of the Kuwaiti logistics company over charges that
it defrauded the U.S. Army in multibillion-dollar contracts.
The order by Judge Thomas Thrash, dated on Wednesday, came
on the heels of a decision by a U.S. appeals court that ended
about 18 months of legal wrangling over whether prosecutors
correctly served the company in its initial indictment in
ATLANTA, July 21 (Reuters) – National Football League (NFL)
owners said on Thursday a desire for fairness and compromise
motivated their decision to approve a new collective bargaining
agreement with players.
The decision opens the way for an end to a lockout that has
left America’s most popular sport in limbo. The next step is a
conference call later on Thursday by player representatives who
must decide their next move.