Alabama county fires attorney in largest municipal bankruptcy

Reuters News
Posted: Apr 12, 2013 5:46 PM

By Verna Gates

Birmingham, Alabama (Reuters) - Alabama's Jefferson County fired its attorney for not working in its best interests, weeks before the county is expected to present a plan to emerge from the nation's largest municipal bankruptcy.

Jeff Sewell, who was placed on administrative leave earlier this week, had been in the legal department for 25 years. More than 800 workers have been let go since the county filed for bankruptcy in 2011.

The county commissioners said the dismissal on Friday was due to directions given by Sewell to the county's outside attorneys "that were not in the best interests of Jefferson County."

They added that the termination would not affect the recovery plan, which would detail how the county intends to fix its debt to exit municipal bankruptcy.

"We have spoken with the creditors and with our outside counsel concerning if we made a change. Everyone was of the consensus that we would work together moving forward and it would not impact or delay our plan of adjustment," County Commissioner Jimmie Stephens told Reuters.

The federal judge overseeing the $4.2 billion bankruptcy agreed last week to hold a status hearing on May 9 to discuss the schedule for filing the plan of adjustment but no hard deadline has yet been set.

Filing a plan of adjustment, which is being readied as the county negotiates privately on terms with some creditors and battles in court with others, is a key step toward ending Jefferson County's landmark 2011 bankruptcy. Any plan must be approved by a federal judge.

Four out of five county commissioners voted to terminate Sewell on charges of insubordination and for contacting bankruptcy attorneys without authorization.

"Sewell has broken no law; he has not violated the code of conduct," said George Bowman, the only county commissioner who voted not to fire Sewell. "This is bogus," Bowman told Reuters.

"I have done my best to fully and faithfully conduct my duties. I have never done anything to hurt any of you. I have tried to protect you," Sewell told the meeting.

"I have tried to avoid the mistakes of the past. If my predecessor had been more assertive, some of these things might not have happened with former commissioners," he added.

Five former county commissioners were convicted for corruption and four went to prison.

(Editing by David Adams, Tiziana Barghini and Phil Berlowitz)