Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Jefferson County, Alabama and Creditors Reach Deal to Exit Municipal Bankruptcy
Author: Joel R. Glucksman
Date: June 18, 2013
Key Contacts
Back
Jefferson County, Alabama, has announced the details of an agreement it reached with creditors that will enable the distressed county to formally exit municipal bankruptcy.
The county has agreed to refinance its existing debts by June 30 in an effort to officially emerge from bankruptcy law protection by November 2013. According to the terms of the agreement, Jefferson will pay its largest creditors, who include JPMorgan Chase, seven hedge funds, and a group of bond insurers, $1.84 billion, which represents 60 percent of the total balance it owes.
Collectively, the creditors hold $2.4 billion of Jefferson County’s debt, but JPMorgan holds the largest percentage at $1.22 billion, and has agreed to forgive $842 million of the balance. The bank will carry the most substantial losses after the bankruptcy has been completed, after giving up its rights to collect a total of $1.57 billion in debt following a separate 2009 settlement with the county.
The hedge funds – which are owed roughly $872 million – will collect more than 80 cents on the dollar under the terms of the deal. Lastly, the county will pay insurers roughly $165 million of the $315 debt balance owed, as well as $25 million to cover any claims filed against the insurers by creditors who aim to recover their losses.
U.S. Bankruptcy Judge Thomas Bennett agreed to the refinancing timeline, but the overall deal is still subject to court approval in November.
Although the county reached an agreement with its largest debt holders, it is still working to establish a plan to pay school warrant holders in full and strike a deal with general obligation debt holders, Bloomberg reports. In an effort build revenue and help repay its debt obligations, Jefferson County residents will see their sewage rates increase by 7.4 percent annually for a four-year period.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
SPACs Are Back, What You Need to Know
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
President Trump's Termination of Member Gwynne Wilcox
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.