Creditors of Jefferson County, Alabama, whose commissioners said they may vote today on filing the biggest municipal bankruptcy in U.S. history, made a new offer for debt reorganization yesterday, according to a receiver there.
John Young said the county’s five commissioners should take more time to review the offer before voting. He said he couldn’t discuss details.
A 30-day standstill agreement between Young and the county expires at midnight tomorrow. In a telephone interview, Young said he was willing to extend it and that commissioners would need another week to review what he described as a multi-issue agreement.
“I think it’s a good offer,” Young said. “There’s a standstill in place and I’m certainly willing to extend it. Seven days would be enough.”
The county, home to Birmingham and more than 658,000 residents, has been under fiscal stress since a sewer-bond refinancing collapsed more than three years ago during the credit crisis. Then, the state Legislature refused to act after a court in March struck down a tax on wages. The levy generated about a quarter of Jefferson’s general-fund revenue. Losing it meant unpaid leave for more than 500 of its 2,000 employees.
The county has proposed that creditors including JPMorgan Chase & Co., which holds most of the bonds, agree to reduce the debt to about $2 billion. Calls to JPMorgan for comment today weren’t immediately returned.