BRADENTON, Fla. — The Jefferson County, Ala., Commission Friday avoided filing the largest municipal bankruptcy in U.S. history by agreeing to a restructuring deal with creditors holding about $3.11 billion of defaulted variable- and auction-rate sewer warrants.

Bankruptcy still is a possibility, however, if the deal falls through or if the county cannot overcome the loss of a major source of income supporting the general fund.

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