Judge approves latest step in Jefferson Co. bankruptcy plan

[lin_video src=http://eplayer.clipsyndicate.com/embed/player.js?aspect_ratio=16×9&auto_next=1&auto_start=0&div_id=videoplayer-1375831424&height=480&page_count=5&pf_id=9624&show_title=1&va_id=4202008&width=640&windows=2 service=syndicaster width=640 height=480 div_id=videoplayer-1375831424 type=script]

BIRMINGHAM, Ala. (WIAT) — Tuesday, a judge approved the latest step in Jefferson County’s plan to get out of bankruptcy.

It happened despite objections from some customers, the Birmingham Water Works Board and the City of Bessemer. It’s a victory for the bankruptcy plan supporters, but the fight isn’t over and the plan could still unravel.

Jefferson County bankruptcy attorney Kenneth Klee says this decision sets the stage for the county to finalize a plan and persuade creditors to buy it, while also preparing for hearings on sewer rate increases.

Some opponents say it sets the stage for sewer customers to get the shaft.

Complaints about the county’s latest disclosure statement ranged from its lack of specific information to its long term impact on homeowners connected to the Jefferson County Sewer System.

Ultimately, Judge Bennett overruled them all.

The Birmingham Water Works Board and City of Bessemer’s objections dealt with how it could hurt their ability to collect from customers if those customers are paying more for sewer bills. The complaints also addressed a public image problem that some customers have the false impression the water board is in charge of sewer rates.

The judge ruled they have no standing in the case.

He also told attorneys with specific objections to the plan to save their arguments for the final confirmation hearing.  This was just background on the amended refinancing plan that the county came up with when the rain of all things put the bankruptcy plan in a precarious position.

“The creditors still get the same $1.835 billion that they were going to get before. But because the sewer revenue collections were low based on the unseasonably wet weather we’ve had in Birmingham this year we had to do something to make up for the revenue shortfall in order for the plan to work,” said Kenneth Klee.

Attorney Calvin Grigsby’s objections were overruled Tuesday, but he says he will get a chance to weigh in on the final plan.

“What was negative about the court’s ruling today is that he is saying that the county does not have to fully disclose the lack of ability to pay on the part of the people who actually use the system,” said Grigsby.

The plan means sewer rates could fluctuate in the future, depending on sewer revenues and variables like the weather. Before it’s a done deal, the county’s creditors have to vote on it. Interest rates also have to come down or it can’t work, but Klee is hopeful that it will.

The confirmation hearing is set for November 12, 1013.

Copyright 2013 WIAT-TV CBS 42

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s