Factbox: Timeline on debt crisis in Alabama's Jefferson County

Reuters News
Posted: Jul 28, 2011 11:38 AM
Factbox: Timeline on debt crisis in Alabama's Jefferson County

(Reuters) - Alabama's Jefferson County is on Thursday set to decide whether to pursue further talks with creditors over a $3.2 billion sewer bond debt or opt for the largest municipal bankruptcy in U.S. history.

Following is a timeline of major events related to the county's debt:

July 28 - Jefferson County to hold an executive session over its crippling debt. County receives an offer from creditors.

July 26 - County hires bankruptcy law firm Klee, Tuchin, Bogdanoff & Stern, LLP.

June 27 - County announces 30-day "standstill" period for talks with creditors. Standstill ends July 29.

June 14 - County water "receiver" John Young announces 25 percent rate increase. Plan shelved in the face of opposition.

June 10 - Bill to give county additional $50 million a year in tax revenue dies in Alabama legislature, dealing blow to county's operating budget.

April - Deadly tornadoes add a further headache to county finances.

March 16 - Alabama Supreme Court declares county occupational tax unconstitutional. The decision creates a shortfall in the county's general fund and forces layoffs.

November 2010 - Newly elected county commission selects David Carrington as president. Election breathes fresh life into county government as previous commission widely criticized.

February 26, 2010 - A federal judge sentenced investment banker William Blount and lobbyist Al LaPierre to four-year prison terms for corrupt bond deals related to the debt.

January 2010 - William Bell elected Birmingham mayor after previous Mayor Larry Langford was convicted of corruption.

November 2009 - Jefferson County sues JPMorgan Securities and JPMorgan Chase for fraud over its debt, as well as Langford and other officials.

November 4, 2009 - JPMorgan Chase reaches agreement with the U.S. Securities and Exchange Commission over a $720 million settlement in an unlawful payment scheme in the county's sewer bond financing.

October 28, 2009 - A federal jury finds Langford guilty of 60 counts of corruption relating to his term as president of the county commission and the bonds swaps that led to its debt. Langford later sentenced to 15 years.

August 14, 2009 - Alabama legislators approve an occupational tax for the county.

May 15, 2009 - State legislators fail to pass a county sales and occupational tax, heaping pressure on its finances.

2008 - Talks begin with creditors to restructure the debt and reduce service repayments.

April 2008 - Moody's Investors Service downgrades a rating on part of the county's debt to seven notches into "junk" status.

2007 - Interest rates soar on the county's variable-rate and auction-rate debt, in part due to a crisis in the mortgage lending sector. County cannot cover its debt service payments.

2002-07 - The county commission under its president, Langford, refinances debt on the advice of consultants with variable-rate and auction-rate debt and interest rate swaps.

Late 1990s - The county incurs huge debt as it upgrades the system and water rates soar as a result.

1996 - The county is required to start upgrading its sewer system to comply with the federal Clean Water Act.

(Writing by Matthew Bigg, editing by Tom Brown and Andrew Hay)