BRADENTON, Fla. — Bankrupt Jefferson County, Ala., has negotiated another agreement to settle defaulted sewer debt with its liquidity banks.
The group, State Street Bank and Trust Co., Bank of Nova Scotia, and Bank of New York Mellon, holds $138 million of sewer warrants.
Details of so-called plan support agreements with the liquidity banks have not been made public because the documents have not been formally approved by the County Commission.
The commission will be asked to vote on the agreements at their regular meeting on Thursday, a county official said.
The federal bankruptcy court in Birmingham will also hold a hearing on Thursday to consider the county's expedited motion to stay, or postpone, action on all litigation related to the sewer system.
In requesting the stay, the county said it has made "good faith progress towards negotiating a largely consensual Chapter 9 plan of adjustment."
Earlier this month, the county negotiated plan support agreements with a majority of sewer system warrant holders, who have enough votes to impose negotiated haircuts ranging between 20% and 88%, with the biggest loss borne by JPMorgan.
The bankruptcy plan support agreements with JPMorgan, bond insurers, and seven hedge funds represents about $2.4 billion, or 78%, of the sewer debt. The total amount outstanding is about $3.1 billion.
The plans contain agreements between the county and creditors to halt all legal action, which is the step being requested at Thursday's hearing.
JPMorgan, the insurers, and hedge funds have promised to vote for the county's plan of adjustment in a process that will play out over the next few months.
The county's goal is to exit bankruptcy by Dec. 20, and go to the bond market to sell $1.835 billion of new sewer warrants to refinance outstanding debt as part of the settlement with current creditors.
