BIRMINGHAM, Ala. Feb 14 Officials in Alabama's
bankrupt Jefferson County approved a deal on Thursday with
European Depfa Bank Plc to cut interest charges on
about $162 million of the county's school debt.
Although the "plan support agreement" saves only about $1
million a year for the county, which in 2011 filed a $4.23
billion municipal bankruptcy, the resolution passed by the
Jefferson County Commission said the deal would likely help the
county hammer out a broader adjustment plan with its Wall Street
Home to Birmingham, Alabama's biggest city, Jefferson County
was primarily driven into what is the biggest bankruptcy ever by
a U.S. local government by massive sewer-system debt now
estimated at $3.2 billion.
Some creditors and county officials are meeting privately to
work out a possible plan likely to require reductions in
interest rates and other concessions by creditors such as
JPMorgan Chase & Co. The plan is needed for Jefferson
County to exit bankruptcy protection. The county filed for
bankruptcy in November 2011.
A representative of Depfa, based in Dublin but supervised
and supported by the German government, did not immediately
respond to an inquiry for comment on the agreement.
Separately, Jefferson County won dismissal on Thursday of a
lawsuit by Birmingham's city government against the closure on
Dec. 31 of in-patient care at Cooper Green Mercy Hospital.
As part of severe cost cutting, which has seen current
fiscal year spending shrivel by $107 million to $205 million,
county officials eliminated in-patient care at Cooper Green used
mostly by poor people in Birmingham.