Settlement Reached for Jefferson County’s Sewer Debt
As a part of the plan to end the biggest US municipal bankruptcy, Jefferson County in Alabama has finally reached settlement to pay its largest creditors. The debt amounted to a total of US$1.84 billion or about 60% of what they owe.
Kenneth Klee, attorney for Jefferson County said that seven hedge funds including JPMorgan Chase & Co. along with a group of insurers agreed with the settlement. This was held today during a commission meeting in Birmingham. Those parties hold roughly US$2.4 billion or 78% of the Jefferson County's cesspool of debt.
JPM agreed to forgive the county's US$842 million debt. The settlement concluded 18 months of bankruptcy court battles to its biggest creditors. Jefferson County borrowed US$3 billion to expand and improved the county's sewage system.
According to the one page summary of the meeting today, the county is under terms of settling sewer-warrant holders a sum of US$1.835 billion from the total amount it borrowed.