The 11th Circuit Court of Appeals has yet to rule on a number of pending motions in Jefferson County, Ala.'s Chapter 9 bankruptcy case.
In mid-July, the appellate court granted nearly a dozen petitioners permission to appeal federal Judge Thomas Bennett's ruling that stripped a state-court appointed receiver of the right to run Jefferson County's sewer system primarily because of unresolved defaults.
Bennett ordered control of the sewer system to be returned to the county, and said that system revenues should continue to pay debt service on the sewer warrants.
Since there is no known precedent for the treatment of a receiver in a Chapter 9 bankruptcy case, Bennett gave creditors approval to file direct appeals of his decisions.
The creditors are seeking oral arguments in what has now been consolidated into a single appeal, and their briefs are due Tuesday.
Richard Levin, representing the Securities Industry and Financial Markets Association, has asked to file an amicus, or friend of the court, brief.
Jefferson County has filed a cross appeal in the case challenging several of Bennett's rulings, including whether the judge erred in allowing sewer system revenues to continue to pay debt service on the sewer warrants.
Since the appeals were filed, Lloyds TSB Bank PLC and Bank of America-Blue Ridge Investments LLC have withdrawn from the case after selling some, or all, of the defaulted sewer warrants they held. The banks said they were not interested in pursuing the appeal, or its costs.
The firms remaining in the case that are Bank of New York Mellon, trustee for the sewer warrants, the former receiver John S. Young, Bank of Nova Scotia, Societe Generale, State Street Bank and Trust Co., JPMorgan, Financial Guaranty Insurance Co., Assured Guaranty Municipal Corp. and Syncora Guarantee Inc.