BRADENTON, Fla. — The 11th Circuit Court of Appeals has postponed oral arguments on several issues relating to Jefferson County, Ala.'s bankruptcy case until Jan. 15.
The appellate court said June 19 that it took the action because the county has entered agreements with a majority of sewer system creditors that "if approved by the bankruptcy court will ultimately moot this appeal."
A number of appeals were pending, and had been consolidated into one case. Creditors holding much of the county's sewer system debt were seeking reversal of a lower court ruling that removed former sewer system receiver, John S. Young Jr., from the position after the county filed for bankruptcy in November 2011.
Jefferson County appealed the bankruptcy judge's ruling which protected the special revenue pledge associated sewer system revenues, and enabled warrant holders to be paid while the Chapter 9 bankruptcy case proceeded.
Jefferson County, JPMorgan, and insurers Financial Guaranty Insurance Co., Syncora Guarantee, Inc., and Assured Guaranty Municipal Corp. requested that oral arguments be postponed because of plan support agreements they, and a group of hedge funds, entered June 4.
The agreements will result in haircuts in the sewer debt ranging between 20% and 88%, with the biggest loss borne by JPMorgan. Creditors participating in the agreements have promised to vote for the county's plan of adjustment, which is expected to be filed June 30.
The appellate court said that the Bank of New York Mellon, trustee for the county's sewer debt, and Young, the former sewer system receiver, did not oppose postponing oral arguments.
A group of liquidity banks holding about $138 million of sewer warrants opposed delaying the appeals, but the court did not address their concern.