http://news.yahoo.com/alabama-countys-bankruptcy-top-4-1-billion-212214662.html

Quote :

"BIRMINGHAM, Ala. (AP) — Leaders in Alabama's largest county said Wednesday a potential bankruptcy filing that could be days away would likely top $4.1 billion, or more than double the previous record set by Orange County, Calif., for a municipal bankruptcy in the United States. The primary problem in Jefferson County is sewer debt of some $3.14 billion that the system can no longer afford to pay. But Commission President David Carrington said the county has another $1 billion in additional debt for school construction and other projects. "It all must be included," said Carrington. The case would easily eclipse the record municipal bankruptcy of $1.7 billion filed by Orange County, Calif., in 1994. But Jefferson County is still trying to find a way to stay out of bankruptcy court. Commissioners said they still had an offer on the table to settle the debt with Wall Street and had yet to receive a formal response just a day before what could be a vote to file for bankruptcy. Talks are ongoing between lenders, county attorneys and state officials, they said. But commissioners also said it would be better to file for bankruptcy than accept a deal that would dramatically increase costs for customers of the county's sewer system, which had to undergo massive renovations and expansions in the 1990s to meet federal water standards. "We're certainly not going to settle just for the sake of settling," said Carrington. Carrington and Commissioner Jimmie Stephens, who oversees county finances, said they expected to receive a proposal from creditors before a meeting Thursday at which officials could decide on filing for bankruptcy. Should settlement talks fail and bankruptcy become impossible to avoid, Carrington said it would be filed within days. Jefferson County has some 658,000 people and includes Birmingham, Alabama's largest city. The county financed court-ordered sewer upgrades with risky transactions later shown to be laced with bribes and influence-peddling. A court-appointed receiver has recommended sewer rate hikes of 25 percent to get the system out of financial trouble, but commissioners want any increases capped in the single digits. County government has been trying to avoid filing bankruptcy since 2008. The deal it offered to JPMorgan Chase and other creditors would erase more than $1 billion of its debt with the promise of repaying the remaining amount through a combination of modest sewer rate increases and loans. Separate from the debt problem and possible bankruptcy, Jefferson County already has laid off about 550 of its 2,300 workers and scaled back government services because courts struck down an occupational tax and business license that provided more than $74 million annually for its operating budget. Bankruptcy would cost the county about $1 million a month in legal bills, accounting fees and expert charges and could go on as long as 18 months, Carrington said, but the county should be able to avoid additional layoffs or service cuts directly related to the sewer debt."

Leave it Bama... Or should I say Birmingham.

[Edited on July 28, 2011 at 2:11 PM. Reason : .]

7/28/2011 2:09:55 PM

I guess no one cares about Bama >_>

7/28/2011 11:10:45 PM

It sucks for them.

Why did they default though? Did they not realize they were going to default? Why was the sewage costs so high?

7/28/2011 11:25:31 PM

I'm guessing the corrupt mayor they had recently has a lot to do with it... I just don't see how it could get that high based on sewage issues alone. I know they had repairs on the system but something is a little off

7/29/2011 10:00:10 AM

why anyone would choose to live in that state is beyond me.

7/29/2011 10:15:35 AM

Quote :

"but something is a little off"

I'm guessing it has something to do with:

"Wall Street"

"risky transactions later shown to be laced with bribes and influence-peddling"

"recommended sewer rate hikes of 25 percent to get the system out of financial trouble, but commissioners want any increases capped in the single digits"

"JPMorgan Chase"

7/29/2011 10:19:35 AM

Quote :

"Carrington later offered another possible solution to the crisis "where the gold at, i want the gold""

[Edited on July 29, 2011 at 10:25 AM. Reason : .]

7/29/2011 10:24:39 AM

Quote :

"why anyone would choose to live in that state is beyond me."

UAB is a popular choice otherwise... I'm not so sure.

7/29/2011 10:42:41 AM

The solution is easy. The county declares bankruptcy and wallstreet will never loan them another dime.

7/29/2011 12:33:51 PM

So rather than up taxes and fees for muni. services, they are choosing to default and declare bankruptcy. This logic is sound, people....there's a reason why Alabama is paving the way in education.

Perhaps a default will clear some of the corruption? /wishful thinking

7/30/2011 3:39:46 PM

^ The goal I see is to stop lenders from buying government bonds in the future.

7/30/2011 3:40:42 PM