’80% chance’ that Alabama’s largest county will declare bankruptcy

The news below is particularly relevant, given tax-rate votes today in both Cobb and Clayton counties. From the Associated Press:

Alabama’s largest county is laying the groundwork for filing what would be the largest municipal bankruptcy in U.S. history.

The Jefferson County Commission approved resolutions Tuesday to both hire prominent bankruptcy lawyers and to sell bonds later in case money is needed to emerge from bankruptcy later.

Two of the five commissioners say there’s an 80 percent chance the county will file bankruptcy over a more than $3 billion debt for its sewer system. The vote could come at a meeting scheduled for Thursday in Birmingham.

The commission president, David Carrington, says other possibilities include extending talks with creditors or accepting a settlement offer.

Jefferson is Alabama’s most populous county. It’s been trying for three years to avoid filing bankruptcy over debt payments it can no longer afford.

- By Jim Galloway, Political Insider

For instant updates, follow me on Twitter, or connect with me on Facebook.

11 comments Add your comment

MrLiberty

July 26th, 2011
1:09 pm

The sooner the local governments get to it the sooner the states can get to it. The sooner they all default the sooner we can assess the wreckage and begin rebuilding a functioning society that lives within its means. We will be forced to as nobody will ever again be stupid enough to lend these criminals money and the criminals will no longer be able to spend beyond their means just to buy votes and favors.

And then when the cities, counties and states have finally woken up, maybe the US government will do the same thing to its debt and we can finally get some sensible policies working there. The chronic dependency on cheap credit, rapidly devaluing dollars, and unfulfillable promises MUST end. A nation that is sitting on nearly $100 Trillion in debt and unfunded liabilities CAN NEVER pay it back. Why is it that only one presidential candidate – Ron Paul – has the courage to speak this truth to the american people? Any why are the american people so unwilling to face this inevitable reality??

ALFO

July 26th, 2011
1:10 pm

can you say water filtration,corrupt politians

Krisheta

July 26th, 2011
1:23 pm

Jefferson County is a special case. Larry Langford, the former B’ham mayor, robbed the county blind during his time as commission president. He’s currently doing 15 years in a fed country club prison for his indiscretions.

Kinda surprised a Political Insider didn’t pick up on that.

hfs

July 26th, 2011
1:32 pm

Birmingham, Detroit, United States government, Is there a common Thread?

Aquagirl

July 26th, 2011
1:36 pm

Another example of the unregulated market sinking our country. JP Morgan did the “creative financing,” none of their executives are in jail. They’re livin’ large while citizens of Birmingham struggle.

And the Republicans would rather sink the entire US rather than raise taxes on these companies or their fatcats. What a noble stand.

Jon Lester

July 26th, 2011
1:47 pm

Only the willfully ignorant can read this story and still deny there is an epidemic problem of corporate greed in this country.

RetiredSoldier

July 26th, 2011
2:33 pm

AQ-

Come on now, who held a gun to their head when the Commission signed the loan papers? And the bank makes out on this deal? The court will probably discharge the debt, who suffers then, yes the bank is who.

Governments are like people, they need to learn responsibility. Wouldn’t it be nice if our President could learn that also. I wonder if the Jefferson County commissioners bkame Bush? Just a thought.

double

July 26th, 2011
5:07 pm

Retired s you worry about banks suffering.It’s about time some of you stop worrying about banks,corporations,the rich and think about the general populace.There is lots more us poor,than fat cats.

RetiredSoldier

July 26th, 2011
5:34 pm

Double-

You miss my point. Why would the bank take advantage of the county if the end result is they lose the money they loaned. Doesn’t make sense.

E.Dunwody

July 27th, 2011
8:49 am

RS–if you’re retired you’re old enough to know that in any relationship, whomever holds the purse holds the power. Turn your own question around–who was holding a gun to JPMC’s head to force them to do the deal? All they had to do was say “no”. They didn’t because they saw an opportunity to make some quick money, probably figured they could re-package it along with their other municipal deals, sell to someone else (or hedge against it) and completely negate their risk. 30 years ago, financial institutions were stingy with their money and prudent in their deal-making. Those days are long gone, unfortunately. And 3 billion for JPMC is chump change–they set aside 6.6 billion in the 4th quarter of 2010 alone for staff compensation–I’ll repeat—6.6 billion for 4th quarter staff compensation. That’s compensation only for the 4th quarter– not for the entire year. Investment banker’s bonuses at JPMC for 2010 averaged $369,000.

Ole Guy

July 28th, 2011
4:27 pm

As long as the Hooters on I-20 entering B’ham stays intact, there’s hope!