On Same Day That Detroit Becomes Eligible, Alabama County Emerges from 2nd-Largest Municipal Bankruptcy
Alabama's Jefferson County on Tuesday closed on a $1.78 billion sewer bond deal and brought an end to what had been the biggest U.S. municipal bankruptcy before Detroit filed for court protection from creditors in July.
On the same day that Detroit, a battered industrial center, won an eligibility order from a federal judge allowing its Chapter 9 bankruptcy to proceed, Jefferson County declared an end to its $4.2 billion case filed on November 9, 2011.
A U.S. judge last month approved an unprecedented settlement between the county and creditors that locked in Wall Street losses easily topping $1 billon. The settlement also calls for 40 years of rate hikes for customers of a county sewer system at the heart of the county's financial crisis.
Home to regional business hub Birmingham, the county's finances were also undone by faulty financing techniques, political corruption and the loss of a local tax that had brought in $60 million a year.