Jefferson County has emerged from one the largest municipal bankruptcies in U.S. history. After two years of meeting with creditors and countless days in court the county commission can operate with more ease. But how did they get to this point? Alabama Public Radio’s Ryan Vasquez talked with Brian Hilson who is President and CEO of the Birmingham Business Alliance about his organization's involvement in helping Jefferson County emerge from bankruptcy and what's next.
The effort to sell $1.7 billion in refinanced Jefferson County sewer warrants begins this week with presentations by local officials in Birmingham and New York.
Jefferson County Commissioner Jimmie Stephens says the milestone means that the county "is alive and well and beginning to kick again."
The presentations come one week after the Jefferson County Commission approved modified deals with sewer creditors. The county's path to exit Chapter 9 bankruptcy relies on the sale of new sewer system warrants to replace soured debt.
Attorneys for Jefferson County have filed a 101-page plan to exit the largest municipal bankruptcy in American history.
The plan calls for cutting the county's $4.2 billion debt by more than $1.2 billion and raising sewer rates annually by 7.41 percent for four years. Rates would rise by 3.49 percent annually for an undetermined amount of years after that.
The plan must be approved by Thomas Bennett, U.S. Bankruptcy Judge for the Northern District of Alabama.
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.