BRADENTON, Fla. – Oral arguments in Jefferson County, Ala.'s bankruptcy appeal have been rescheduled once again, and moved.
The 11th Circuit Court of Appeals placed the Chapter 9 case on its tentative calendar for the week of Nov. 14, after attempting to schedule arguments for September and three other times this year.
Oral arguments will be held in Montgomery, Ala. instead of the previously scheduled location in Atlanta, according to the court docket.
The long-awaited case could impact the municipal bond market if Jefferson County's 2013 bankruptcy plan of adjustment – which hinged on selling debt – is overturned.
County officials and their attorneys have routinely said they believed the bankruptcy petition, filed in 2011 and resolved two years later, is on sound legal ground.
A group of ratepayers on the county's sewer system filed objections in the initial bankruptcy case as the county developed a plan to write off a portion of the system's $3.2 billion of debt.
Ratepayers have claimed that the plan, which they say requires unreasonable sewer system rate increases over 40 years, is unconstitutional.
The bankruptcy court rejected the ratepayer's arguments and approved Jefferson County's exit from bankruptcy in December 2013, after the county sold $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, the 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 11th Circuit Court of Appeals agreed to take the county's case in April 2015.
The appellate court decided in January 2016 that oral arguments were necessary before ruling on the county's appeal.
