ABC 33/40 - Birmingham News, Weather, SportsCity of Prichard filing brief in JeffCo bankruptcy

City of Prichard filing brief in JeffCo bankruptcy

Another financially strapped community is trying to help Jefferson County's case for bankruptcy protection.

Despite sewer creditors' objections, the federal bankruptcy judge is allowing the City of Prichard to file a friend of the court brief.

Prichard was denied bankruptcy because its debt was in warrants, not bonds.

The Alabama Supreme Court is now reviewing that decision.

It's the same problem Jefferson County faces. It has issued bonds in the past and the commission even passed a resolution over the summer giving it the authority to issue new ones. However, its current debt is from warrants.

Creditors argue Alabama bankruptcy law only allows municipalities to file if the debt is from bonds. They've even asked the federal bankruptcy judge in this case to look to the Alabama Supreme Court for clarification on the issue before proceeding.

If granted, Jefferson County's bankruptcy would be the largest in the nation exceeding four billion dollars.