BRADENTON, Fla. — Bond insurer Syncora Guarantee Inc. warned prospective buyers of some of Jefferson County, Ala.’s defaulted auction-rate sewer warrants that the insurer may seek to subordinate that debt to its own claims if the warrants are sold to investors by JPMorgan.

If subordination occurs, it would place the claims of JPMorgan, and any subsequent buyers of the auction-rate warrants owned by the bank, last to be paid in the county’s bankruptcy case. There is not enough sewer revenue to pay all the outstanding debt as currently structured.

Investors could be at risk of subordination if Syncora succeeds in its fraud suit against JPMorgan and Jefferson County in New York State Supreme Court. The case is pending and currently unable to proceed due to the automatic stay that went into effect when the county filed the nation’s biggest muni bankruptcy in November.

Syncora alleges that JPMorgan and the county “fraudulently induced” it to insure more than $1 billion of the county’s $3.2 billion of variable- and auction-rate sewer warrants.

The subordination notice was filed in Jefferson County’s bankruptcy case this week because it was suspected that JPMorgan would attempt to sell the warrants, according to a source familiar with the situation. JPMorgan owns auction-rate warrants that it had to buy back as a result of the credit crisis.

“This pleading is a clever use of what appears to be a mere informational pleading to put potential purchasers of JPMorgan warrants, as well as other creditors, on notice that Syncora may assert that its claims for reimbursement for any guaranty payments it is required to make should have priority over the warrant claims held by JPMorgan, and by extension, warrants held by anyone who buys the warrants from JPMorgan,” said John Whitlock, a partner and bankruptcy attorney at Edwards Wildman Palmer LLP.

Syncora does not comment on pending litigation, said Mike Corbally, managing director and chief administrative officer.

The notice itself is a unique type of filing, but it recognizes a common practice, Whitlock said.

“Warrants, bonds and other claims are frequently traded during bankruptcy proceedings,” he said. “If the original holders of claims sell them to others who speculate in the claims, the makeup of the creditor group may be sufficiently changed so that the type of plan might be affected.”

In the New York fraud suit, Syncora said it would not have insured the county’s warrants if it had known about “bribes” that JPMorgan paid to county commissioners to become lead underwriter for the sale of the warrants and counterparty to “lucrative swap agreements.” Allegations of bribery came to light in civil court filings by the Securities and Exchange Commission followed by a federal criminal corruption case involving former County Commission president Larry Langford, former Montgomery bond dealer Bill Blount, Alabama lobbyist Al LaPierre, JPMorgan and two JPMorgan bankers, Charles LeCroy and Douglas MacFaddin.

Langford, who orchestrated the refinancing of the now-failed sewer debt, is serving a 15-year prison sentence.

Blount and LaPierre are also in prison. The SEC is pursuing charges against LeCroy and MacFaddin.

Syncora also said a vital study was withheld when the warrants were sold, casting doubt on the county’s ability to repay the sewer debt.

Winning that suit would enable Syncora Guarantee to seek subordination of claims by JPMorgan and investors who bought warrants from the bank.

“The alleged wrongdoing in this case and the amounts at stake assure that the case will not be routine,” Whitlock said. “If Syncora has any success in its New York case, the results may spill over into the development of the Jefferson County reorganization plan.”

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