Alabama Leaders Gain Momemtum in Bankruptcy Deal

Alabama leaders have reported that they are gaining momentum toward striking a deal between Jefferson County and Wall Street creditors in regards to the largest municipal bankruptcy in the country.

Negotiators with the county met with county’s sewer system creditors in order to begin discussing a deal. While exact details were not discussed, officials have stated that further meetings are to take place in New York during theĀ  beginning of December.

A written statement was given by officials and reported that the meeting was “productive,” but “much work” is still needed to be done before a deal can be made.

Jefferson County filed for Chapter 9 bankruptcy on Nov. 9, 2011 reporting $4.23 million in debt. The court documents show that most of the debt is related to the loss of tax on local jobs, political corruption issues and debt from the a new sewer system.

Chapter 9 bankruptcy alleviates the stress of lawsuits being filed against the county, but states that a plan must be developed to pay creditors back as well as set up a fund to help with future operations. The plan must then be approved by a U.S. Bankruptcy judge and county officials are hoping that it will be ready for approval sometime this winter.

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