A beautiful thing is happening on Twitter. Local and national reporters are tweeting Chapter 9 municipal bankruptcy hearings as they happen. This is a great service for muniland because there is usually no audio feed at these hearings. Municipal bankruptcies are rare, so each one potentially creates new precedents for those that follow. At the Jefferson County, Alabama hearing to confirm the city’s plan to exit bankruptcy, Kyle Whittemore of the Birmingham News, Katy Stech of the Dow Jones Newswire and Jonathan Hardison of FOX6 WBRC-TV report from the court a day after $1.8 billion of new debt was raised to repay old debt. Bloomberg lays out the back story:
Jefferson County, Alabama, may learn as soon as today whether a federal judge will end its two-year-old bankruptcy by approving $1.5 billion in creditor concessions, the first time since the Great Depression a U.S. municipality has imposed principal losses on bondholders.
“I understand it is somewhat unusual,” U.S. Bankruptcy Judge Thomas Bennett said today of his plan to give an oral ruling from the bench followed by a written order. The county could close on $1.84 billion in new financing by Dec. 3 should the plan win approval following testimony that started today in Birmingham, the county seat.
Today’s hearing was set to give the last two groups of opponents a chance to convince Bennett to reject the county’s so-called plan of adjustment.
The last major opposition to the plan comes from two sets of lawyers fighting to save the suits they filed on behalf of plaintiffs including sewer ratepayers. The lawyers asked Bennett to reject the plan so they can continue to sue JPMorgan Chase (JPM) & Co. and others behind the sewer debt.