In a move to avoid the largest municipal bankruptcy in U.S. history, holders of more than $3 billion in debt issued by Jefferson County, Ala., are working on a rescue that would leave them with steep losses. The offer calls for bondholders to forgive about $1 billion of the $3.14 billion in sewer debt owed by Alabama's most populous county, which has about 665,000 residents, a person familiar with the matter said. Banks, hedge funds and mom-and-pop investors that own the sewer bonds are scrambling to agree on concessions before a Thursday meeting, where officials in Jefferson County, which includes Birmingham, might decide to file for bankruptcy. As of late Tuesday, the situation remained fluid, and it was possible the last-ditch offer would fall apart. John S. Young, a court-appointed receiver who is participating in the talks, said bondholders still "have a way to go." The deal being worked on also includes money that would be set aside to help struggling Jefferson County residents pay their sewer bills, a person familiar with the matter said. http://online.wsj.com/article/SB100...00614.html?mod=WSJ_hp_LEFTWhatsNewsCollection Maybe Europe should launch a financial news tabloid called "European Times" and publish every single day headlines like "New York´s debt/GDP ratio rises over 179%" or "Los Angeles citizen not paying their pool taxes"... But maybe the answer to all US problems can be found here: Municipal Bankruptcy: Avoiding and Using Chapter 9 in Times of Fiscal Stress Introduction Municipalities1 have been increasingly squeezed between the cost of providing basic services (which in general has been increasing at a rate significantly higher than inflation) and flat or declining revenues (due to the economic slowdown and in particular the difficulties in the housing market affecting property tax revenues and spending patterns). In the face of these pressures, the possibility that some may want or need to seek protection under chapter2 9 of the United States Bankruptcy Code has become more real. In May 2008, the City of Vallejo, California filed a chapter 9 petition, and several other California municipalities have been reported in the media to be considering a filing. Jefferson County, Alabama, also has been reported to be on the edge of filing for several months due to financial problems with its sewer system, among other things. Whether this is the start of a larger trend remains to be seen, but it is clear that the stresses that can produce the drastic step of filing for bankruptcy protection currently are affecting many municipalities. http://www.orrick.com/fileupload/1736.pdf
bankruptcy on a sewer ???? Ahahahaha Our sewers are bankrupt. Ya'd think one would want to go bk over a stadium or a trip to vegas but a sewer. Our finances are in the sewer. Good money down the drain.
looks like Jefferson County is full of shit..how to hell you can default on sewer system? what really puzzles me is the current bond rates..if everything is this bad and government about to default,local government about to default,armageddon of all defaults about to strike.. why the hell then we have 2-3-5% for 20-30 years? it's should be like 35%..looks like no one is scared,but me.. lehman is not enough as a AAA bond failure example? possible 30% haircut on Jeffeson munis is not enough for the rest of the bond investors? what the hell those "struggling residents" are paying for their bills? in our area it's like $50 in a quarter..i guess they have to shit less and cut on shower..this is how it's go,when you can't pay your bills.
Holy crap! That's about $5k of debt for every man, woman and child who lives in that county. Something stinks to high heaven and its not the sewage!
You really have to perform a bit of due diligence to fully understand the scope of the fraud in Jefferson County. Once you read a bit about it, you will realize it's a perfect analogy for so much of what has taken place throughout the rest of the country. We have 2-3-5% because the free market is broken.
Back to the outhouse for Alabama. Remember, when Bo and Luke blew up their outhouse, all they had to do is build a new one.
Definitely fraud. A s elected few are having a good time. Investors are getting screwed by debtors again. When will they learn.