Follow Newser on Twitter   Friend Newser on Facebook
Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Ala. County to File Biggest Municipal Bankruptcy

Birmingham's Jefferson County deep in the red

By John Johnson,  Newser Staff

Posted Nov 9, 2011 5:30 PM CST

(Newser) – Jefferson County is Alabama's most populous county, the home of Birmingham, and now destined to be the answer to a dubious trivia question: County commissioners today voted to file the biggest municipal bankruptcy in US history, reports the Birmingham News. The $4.1 billion bankruptcy stems from $3.14 billion in debt to creditors—mostly Wall Street banks, led by JPMorgan Chase—over repairs to the sewer system.

Interest rates on county bonds have spiraled out of control in the Great Recession, and the county can no longer make payments. The bankruptcy threat has loomed for three years, and it could ripple in the national muni bond market, notes Bloomberg. “It’s going to create attention-grabbing headlines, and the question is how retail investors react,” says one in the industry. The move comes a month after Harrisburg, Pa., found itself in similar straits.

Jefferson County, Alabama, is just about out of options.
Jefferson County, Alabama, is just about out of options.   (Shutterstock)
« Prev« Prev | Next »Next » Slideshow
My TakeCLICK BELOW TO VOTE
16%
3%
55%
8%
14%
5%
To report an error on this story, notify our editors.
A snapshot of the day's best news stories.
 
COMMENTS
Showing 3 of 23 comments
WallyEFunk
Nov 10, 2011 10:26 AM CST
" "—over repairs to the sewer system." " or EPA is not the main problem at all. Ignorance is....History will repeats with it.
hopeandchange
Nov 10, 2011 4:48 AM CST
"—over repairs to the sewer system." This may sound strange but it's very possible.  The EPA has demanded trillions in unfunded mandates to separate storm water runoff from sewers for the dubious reason of some e coli showing up just outside the drains.  The       e coli disappears just a few feet downstream but the EPA is demanding absurd rebuilding of sewer systems. Just another reason the EPA should be abolished root and branch.
chezwhat
Nov 10, 2011 1:22 AM CST
You bought the GOP tax cuts. The GOP butt buddies on Wall Street finished the job.
US

 
bankruptcy • Alabama • Birmingham • Jefferson County • Harrisburg

More Newser Stories

2 Dead as Storms Slap South, Midwest

Harrisburg, Pa., Declares Bankruptcy

Math Teacher's Bad Lesson: How to Shoot Obama

Obama Ally Launches Bid for Ala. State House

US Multinational Faces Human Rights Trial
NEWS FROM OUR PARTNERS
Other Sites We Like:   24/7 Wall St.   |   BuzzFeed   |   Cracked   |   Timelines   |   Geek Sugar   |   Business Insider   |   HuffPost Entertainment