Largest ever municipal bankruptcy of $4.15B sought in Alabama over sewer project, other debt
The biggest civic bankruptcy in American history could leave residents of Alabama’s most populous county paying astronomical rates for public services performed by a skeleton crew of county workers. Or it could simply mean tightening the belt another few notches, depending how much of Jefferson County’s $4.15 billion debt will have to be paid.
It’s even possible that, just as companies have benefited from bankruptcy, that the county surrounding Birmingham will emerge stronger for it.
For now, much is uncertain for following the county’s Chapter 9 filing on Wednesday. The full impact on its 658,000 resident’s won’t be clear until after a judge approves the move at a hearing next month and local officials negotiate a plan with creditors for adjusting its debts. The outlook among some officials was grim a day after the filing, while others defended the move.