Creditor trustee in Alabama bankruptcy says no Feb 1 payment

BIRMINGHAM, Ala. Fri Feb 1, 2013 12:54pm EST

BIRMINGHAM, Ala. Feb 1 (Reuters) - A lawyer for the creditors trustee in America's biggest municipal bankruptcy on Friday said the trustee will not make a Feb. 1 payment to owners of $3.14 billion of sewer debt issued by Alabama's Jefferson County.

Gerald Mace, an attorney for creditors trustee, Bank of New York Mellon, told a bankruptcy court hearing that the distribution could not be made because of a "lack of funds".

The size of the payments drawn from sewer system revenues varies and the amount of the expected payment was not known, county officials at the hearing said.

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