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Alabama county votes for $4.1B bankruptcy

Nov. 9, 2011 at 8:06 PM   |   Comments

BIRMINGHAM, Ala., Nov. 9 (UPI) -- The Jefferson County Commission voted 4-1 Wednesday to take the Alabama county into bankruptcy, at $4.1 billion the largest municipal filing U.S. history.

Officials for the state's most populous county have been wrangling with the financial crisis, fueled in large part by a $3.14 billion sewer debt, since February 2008, The Birmingham News reported.

"It is time to resolve this once and for all," said Commissioner Jimmie Stephens, who made the motion to file bankruptcy.

Jefferson County, caught up in the nation's subprime mortgage crisis, has seen the interest rate it's paying on some of its sewer system debt rocket from 3 percent to 10 percent in recent weeks.

The decision to go the Chapter 9 bankruptcy route appeared to have been influenced by a lack of help from the state Legislature, the newspaper said.

The filing would far surpass the $1.5 billion bankruptcy filed by Orange County, Calif., in 1994.

© 2011 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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