Bankruptcy on the table for Alabama County: Governor

Reuters News
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Posted: Jul 16, 2011 3:33 PM
Bankruptcy on the table for Alabama County: Governor

SALT LAKE CITY (Reuters) - Bankruptcy is still a "very strong possibility" for Alabama's Jefferson County, even though the move -- which would be the largest municipal bankruptcy in U.S. history -- could make it harder to attract business, Governor Robert Bentley said on Saturday.

"It is still on the table, and it's a very strong possibility," Bentley told Reuters during the National Governors Association meeting in Utah's Salt Lake City.

Bentley said he is not open to sending money to the county. He also said he would agree to support forms of credit enhancements for new county debt, but the state would not guarantee that debt.

Bentley said an increase in sewer fees would be necessary to generate funds for debt payments, but he said the increases should not exceed 10 percent.

A $3.2 billion bond debt related to Jefferson County's sewer system has pushed the county toward the brink, and a rare Chapter 9 municipal bankruptcy could have ripple effects in the $2.9 trillion U.S. municipal bond market.

(Reporting by Edith Honan in Salt Lake City and Matthew Bigg in Atlanta)