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Alabama county's plan to end $4.2 bln bankruptcy gets judge's OK
November 21, 2013 / 10:36 PM / 4 years ago

Alabama county's plan to end $4.2 bln bankruptcy gets judge's OK

BIRMINGHAM, Ala., Nov 21 (Reuters) - A U.S. judge on Thursday approved a landmark settlement between Alabama’s bankrupt Jefferson County and creditors that locks in more than $1 billon of losses for Wall Street and clears a path to end the second-biggest U.S. municipal bankruptcy case.

Acting just days after underwriters sold $1.78 billion of Jefferson County sewer-system debt, Federal Bankruptcy Judge Thomas Bennett in Birmingham overruled objections by sewer users looking at 40 years of rate hikes and confirmed the agreement.

County officials have said they hope to close next week on the bond sales, whose proceeds will pay off JPMorgan Chase and other owners of $3.1 billion of defaulted sewer debt at about 54 cents on the dollar. (Reporting by Verna Gates; Writing and additional reporting by Michael Connor in Miami; Editing by Dan Grebler)

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