By Melinda Dickinson
BIRMINGHAM, Ala. Oct 8 Creditors in the $4.2
billion municipal bankruptcy case involving Alabama's Jefferson
County have "overwhelmingly approved" the county's plan of
adjustment, Jefferson County Commission President David
Carrington said on Tuesday.
A group of creditors which included pension funds and
individual investors had until an Oct. 7 deadline to submit
their votes on a bankruptcy exit plan approved in August by the
judge in the case. Carrington said the final count will come
later this week.
The approval comes after the county's biggest Wall Street
creditors, including JPMorgan Chase & Co and Bank of New
York Mellon, previously signed off on the plan, which will
include losses of as much as 70 cents on the dollar.
The negotiated plan promises to deliver only $1.835 billion
to sewer-system warrant holders owed $3.078 billion, with
bondholder losses on a scale not seen since the 1930s.
Jefferson County was the largest municipal bankruptcy case
in U.S. history until the city of Detroit in July sought
protection from creditors under Chapter 9 of the U.S. bankruptcy
code with a debt load exceeding $18 billion. That case is
Approval by the creditors paves the way for a year-end bond
sale of about $1.9 billion that is needed to pay off current
sewer debt bondholders at sizable discounts.
In November 2011, Jefferson County sought protection from
creditors, stung by overwhelming sewer debt and diminished
The county has also struck deals covering defaulted school
warrants and other non-sewer debt.