Though Jefferson County, Ala., announced Tuesday a deal with sewer system creditors that could help it exit bankruptcy, appeals on urgent questions about Chapter 9 may continue.
Creditors are asking the 11th Circuit Court of Appeal in Atlanta whether a bankruptcy judge can remove a state-court appointed receiver. Jefferson County is appealing the judge’s ruling on the use of sewer system revenues during bankruptcy.
A Jefferson County state court appointed a receiver to take charge of the sewer system before the county filed for bankruptcy in November 2011. The bankruptcy judge removed the receiver early in the case.
Court-required mediation involving all parties is scheduled for July 10 and 11.
The appellate court hears oral arguments on July 24, and has agreed to extend time for presentations due to the number of appeals.
“The mediation will take place in the context of ongoing negotiations among the parties to resolve the bankruptcy case on a partially or entirely consensual basis,” the county’s attorney said in a filing May 24 updating the appellate judges on efforts to reach agreement with sewer system creditors.
Documents filed by the county for the benefit of investors on Tuesday announcing an agreement with sewer creditors discuss a “standstill” period for litigation though it was not immediately clear when that period would begin.
