Jefferson County municipal bankruptcy

An Alabama county hopes to end the largest municipal bankruptcy in U.S. history by the end of this year.

Jefferson County Manager Tony Petelos was among the first witnesses called as a hearing began before a bankruptcy judge.

The hearing this week is aimed at determining whether county sewer bondholders will be allowed to go back to state court to force higher sewer rates.

The hearing before Chief U.S. Bankruptcy Court Judge Thomas Bennett deals with motions by The Bank of New York Mellon and other creditors that ask him to lift the automatic-stay on legal action against the bankrupt county.

The Birmingham News

This could be an important week in Jefferson County's attempt to emerge from the largest municipal bankruptcy in U.S. history. ( ) reports that the county commission president and another commissioner will be in New York for meetings with hedge fund managers as they try to negotiate a deal.

On Wednesday, a federal bankruptcy judge in Birmingham will begin a hearing on a request by creditors who want to go to state court seeking rate increases for sewer service in Jefferson County.