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Alabama Sheriff Seeks Bankruptcy Ruling on Halting Lawsuits

Nov. 28 (Bloomberg) -- The Sheriff of Jefferson County, Alabama, asked a judge whether he and his deputies can receive a temporary reprieve from lawsuits as a result of the county’s bankruptcy along with other county officials.

Sheriff Mike Hale asked the federal judge overseeing the bankruptcy whether his department is entitled to the so-called automatic stay of lawsuits that was granted the county’s government when Jefferson County filed bankruptcy earlier this month.

“He and various Jefferson County Deputy Sheriffs are defendants in a number of pending lawsuits involving actions and alleged actions taken in the course of their employment,” Hale said in court papers filed today in U.S. Bankruptcy Court in Birmingham.

Jefferson County became at least the 12th entity to file a Chapter 9 bankruptcy this year after the county, state officials, and bondholders all failed to implement a tentative agreement that would have cut debt by about $1 billion.

U.S. Bankruptcy Judge Thomas B. Bennett ended a hearing last week without immediately ruling on whether the automatic stay limits the powers of a receiver who operates the county’s sewer system. Debt related to the system is one of the reasons the county said it filed bankruptcy.

Hale, who is elected by county voters, is technically considered a state official, although his salary and the department’s budget is provided by Jefferson County, as would be any damage awards from a court case against him.

“Accordingly, an adverse verdict rendered against Sheriff Hale or a Jefferson County Deputy Sheriff (for actions taken in the course of his employment) may adversely impact the coffers of Jefferson County,” Hale said in court papers.

The case is In re Jefferson County, 11-05736-9, U.S. Bankruptcy Court, Northern District of Alabama (Birmingham).

To contact the reporter on this story: Steven Church in Wilmington at schurch3@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.

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