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Bankruptcy judge curbs Alabama county's cash use
Source: Reuters
Bankruptcy judge curbs Alabama county's cash use
Fri Jun 29, 2012 3:14pm EDT
(Reuters) - The judge in the landmark bankruptcy of Alabama's Jefferson County sided with Wall Street creditors on Friday and sharply limited how the cash-strapped county government can use funds generated by its sewer system.
Ruling in a months-long court dispute over the size of payments to owners of about $3.2 billion of sewer-system debt, U.S. Bankruptcy Judge Thomas Bennett said the county cannot pay legal fees and set aside charges for depreciation and amortization from net operating revenues owed to creditors.
Creditors such as Bank of New York Mellon and JPMorgan Chase had argued that the county had been illegally using money for other purposes. The county claimed it needed the money for repairs and other capital expenses.
Jefferson County, the home of Birmingham, the state's business hub, filed a $4.23 billion bankruptcy claim - the largest ever by a U.S. local government - on November 9.
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Fri Jun 29, 2012 3:14pm EDT
(Reuters) - The judge in the landmark bankruptcy of Alabama's Jefferson County sided with Wall Street creditors on Friday and sharply limited how the cash-strapped county government can use funds generated by its sewer system.
Ruling in a months-long court dispute over the size of payments to owners of about $3.2 billion of sewer-system debt, U.S. Bankruptcy Judge Thomas Bennett said the county cannot pay legal fees and set aside charges for depreciation and amortization from net operating revenues owed to creditors.
Creditors such as Bank of New York Mellon and JPMorgan Chase had argued that the county had been illegally using money for other purposes. The county claimed it needed the money for repairs and other capital expenses.
Jefferson County, the home of Birmingham, the state's business hub, filed a $4.23 billion bankruptcy claim - the largest ever by a U.S. local government - on November 9.
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Read more: http://www.reuters.com/article/2012/06/29/us-usa-alabama-jeffersoncounty-idUSBRE85S1D620120629
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