| March 6,
March 6, French bank Societe Generale
is exiting America's biggest municipal bankruptcy, saying in
court filings that it had sold its holdings of defaulted sewer
warrants issued by Alabama's Jefferson County.
The bank, along with JPMorgan Chase, Bank of New
York Mellon and other global financial institutions, was
one of the most prominent creditors of Jefferson County when it
filed its $4.23 billion bankruptcy in November 2011, but now is
moving to wind up its role in court battles.
"Societe Generale has transferred all its rights, title and
interest in and to those certain Jefferson County Sewer Revenue
Refunding Warrants issued by Jefferson County," lawyers for the
bank said in motions to the 11th Circuit U.S. Court of Appeals
The lawyers also asked that Societe Generale be dropped from
two appeals in the tangled and costly legal case, saying the
bank "was no longer interested in pursuing the claims that are
subject of the appeal(s)."
Arguments on the appeals - one over sewer-system rates and
another on the ouster of a creditors-favored receiver, who had
run Jefferson County's troubled sewer system - are tentatively
scheduled in Atlanta for the week of July 22, according to court
The Societe Generale filings did not detail the value of the
sewer warrants it had sold nor identify the buyers, though the
bank filed three claims against the county of about $118 million
each in 2011. A lawyer for the bank was not immediately
Societe Generale's filings come as negotiations continue
between the county, whose bankruptcy was mostly caused by soured
sewer debt now valued at $3.2 billion, and some creditors that
may result in reductions in the value of the debt.
In February, Jefferson County officials approved an
agreement with European Depfa Bank Plc to cut interest charges
on about $162 million of the county's school debt.
Home to Birmingham, Alabama's biggest city, Jefferson
County's finances were also hurt by political corruption and the
loss of an occupational tax. The county has slashed staffing,
eliminated hospital services at a Birmingham healthcare facility
and cut back on road repairs and other services. Current fiscal
year spending has been reduced $107 million to $205 million.