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
When Are New Jersey Business Owners Personally Liable for Corporate Debt?
New Jersey personal guaranty liability is a critical issue for business owners who regularly sign contracts on behalf of their companies. A recent New Jersey Supreme Court decision provides valuable guidance on when a business owner can be held personally responsible for a company’s debt. Under the Court’s decision in Extech Building Materials, Inc. v. […]
Author: Charles H. Friedrich
Commercial Real Estate Trends to Watch in 2026
Commercial real estate trends in 2026 are being shaped by shifting economic conditions, technological innovation, and evolving tenant demands. As the market adjusts to changing interest rates, capital flows, and workplace models, investors, owners, tenants, and developers must understand how these trends are influencing opportunities and risk in the year ahead. Overall Outlook for Commercial […]
Author: Michael J. Willner
One Big Beautiful Bill: New Tip Income Tax Rules Employers & Workers Need to Know
Part 2 – Tips Excluded from Income Certain employees and independent contractors may be eligible to deduct tips from their income for tax years 2025 through 2028 under provisions included in the One Big Beautiful Bill. The deduction is capped at $25,000 per year and begins to phase out at $150,000 of modified adjusted gross […]
Author: Scott H. Novak
One Big Beautiful Bill: New Overtime Tax Rules Employers and Employees Need to Know
Part 1 – Overtime Pay and Income Tax Treatment Overview This Firm Insights post summarizes one provision of the “One Big Beautiful Bill” related to the tax treatment of overtime compensation and related employer wage reporting obligations. Overtime Pay and Employee Tax Treatment The Fair Labor Standards Act (FLSA) generally requires that overtime be paid […]
Author: Scott H. Novak
New York’s FAIR Business Practices Act: What the New Consumer Protection Measure Means for Your Business
In 2025, New York enacted one of the most consequential updates to its consumer protection framework in decades. The Fostering Affordability and Integrity through Reasonable Business Practices Act (FAIR Act) significantly expands the scope and strength of New York’s long-standing consumer protection statute, General Business Law § 349, and alters the compliance landscape for New York […]
Author: Dan Brecher
How to Reduce Legal Risk as Your New Jersey Business Grows in 2026
For many New Jersey businesses, growth is a primary objective for the New Year. However, it is important to recognize that growth involves both opportunity and risk. For example, business expansion often results in complex contracts, an increased workforce, new regulatory requirements, and heightened exposure to disputes. Without proactive planning, even routine growth can lead […]
Author: Ken Hollenbeck
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.