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 in Atlanta.
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 filings.
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 available.
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.