For Jefferson County, Delayed Bankruptcy Appeal is Frustrating

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BRADENTON, Fla. - The federal appeals court overseeing Jefferson County's bankruptcy appeal has delayed the case, once again.

Oral arguments tentatively set for Dec. 12 were removed from the calendar of the 11th Circuit Court of Appeals in Atlanta last week, to be reassigned at a later date.

Jefferson County Commission President Jimmie Stephens said he could offer no explanation for a series of delays this year.

The court has postponed the case six times since determining in January that oral arguments would be necessary.

"It is very unusual to have this many delays and I have expressed my frustration to counsel," Stephens said in an email on Monday. "Our team is ready and eager to have our day in court. We stand at their mercy."

Stephens did not respond to a question asking how much the appeal has cost.

Jefferson County exited Chapter 9 bankruptcy in December 2013, after selling $1.8 billion in sewer warrants to write down $1.4 billion of the sewer system's debt.

The plan of adjustment gives bondholders the right to go back to the bankruptcy court if the county fails to enact sewer system rate increases that service the debt.

After the plan was implemented, a group of local ratepayers filed an appeal before U.S. District Judge Sharon Blackburn in the Northern District of Alabama.

County attorneys argued that the appeal should be struck down, saying that it became moot when the plan of adjustment was implemented with the sale of new debt.

In October 2014, Blackburn rejected the county's mootness contention, and ruled that she could consider the constitutionality of the plan.

The county appealed Blackburn's ruling, and the appeals court agreed to take the case in April 2015.

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Bankruptcy Alabama
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