Jefferson County Appeals Court Sets Mandatory Talk Dates
Jefferson County, Alabama, and creditors it is fighting in bankruptcy were ordered to meet with a court mediator, a routine process used to try to settle cases before they are argued in front of appellate court judges.
The list of participants include the trustee for sewage system creditors owed about $3.2 billion, JPMorgan Chase Bank, bond insurers and a group known as the Ad Hoc Sewer Warrantholders. Those holders include hedge funds Brigade Capital Management LLC, Claren Road Asset Management LLC, Fundamental Advisors LP and Monarch Capital Master Partners LP.
The county and the same group of creditors have repeatedly failed to agree on how to end the bankruptcy, which involves the largest amount of debt a U.S. municipality has ever tried to reorganize under court protection. Orange County, California, filed a larger bankruptcy in the 1990s, but much of its debt was quickly resolved in the early weeks of the case.
The trustee for sewer creditors, Bank of New York Mellon Corp., is battling the county in U.S. Bankruptcy Court in Birmingham, Alabama, and in a federal appeals court in Atlanta over whether the county or a receiver should run the sewage system.
The appeals court ordered the mediation, which is scheduled to take place April 24-25. The county and the creditors are scheduled to argue their appeals in July.
The case is In re Jefferson County, 11-bk-05736, U.S. Bankruptcy Court, Northern District of Alabama (Birmingham). The appellate case is Jefferson County, Alabama v. Bank of Nova Scotia (BNS) New York, 13-10348, U.S. Court of Appeals for the Eleventh Circuit (Atlanta).
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