Bankrupt Ala. County Finds Salvation in Euro Bank

Jefferson County, Ala., approved a deal Thursday with European Depfa Bank Plc to cut interest charges on approximately $162 million of the bankrupt county’s school debt, Reuters reports.

“Although the ‘plan support agreement’ saves only about $1 million a year for the county, which in 2011 filed a $4.23 billion municipal bankruptcy,” the report notes, “the resolution passed by the Jefferson County Commission said the deal would likely help the county hammer out a broader adjustment plan with its Wall Street creditors.”

Jefferson County Commission president David Carrington

signs Chapter 9 bankruptcy papers (Photo Source: AP Photo)

Blaze readers may recall that Jefferson County, home to Birmingham, was plunged into the largest bankruptcy in U.S. history after a disastrous, ill-planned, and corrupt planned sewer-system racked up over $3.2 billionin debt.

“Some creditors and county officials are meeting privately to work out a possible plan likely to require reductions in interest rates and other concessions by creditors such as JPMorgan Chase & Co.,” Reuters notes.

“The plan is needed for Jefferson County to exit bankruptcy protection. The county filed for bankruptcy in November 2011,” the report adds.

Depfa is based in Ireland but supported and run by the German government.

“As part of severe cost cutting, which has seen current fiscal year spending shrivel by $107 million to $205 million, county officials eliminated in-patient care at Cooper Green used mostly by poor people in Birmingham,” the report adds.

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