Alabama
6:13 pm
Fri April 20, 2012

Ala. High Court Allows City Bankruptcies To Proceed

Montgomery, AL – The Alabama Supreme Court paved the way for the city of Pritchard to move forward with a nearly 3-year-old filing for bankruptcy.

The ruling released on Friday says cities don't need to have bond debt in order to declare bankruptcy. That means Pritchard's filing can move forward, but also paves the way for Jefferson County's largest-in-history municipal bankruptcy.

When Pritchard filed bankruptcy in 2009, it stopped making its pension payments. A group of city employees went to the courts to stop the bankruptcy filing. A U.S. Bankruptcy Court agreed with the pensioners, but the city appealed.

A lawyer for the city employees could not immediately be reached for comment on how it might affect city employees' pensions.

(Copyright 2012 by The Associated Press. All Rights Reserved.)