BIRMINGHAM, Alabama — Jefferson County closed the sale of nearly $1.8 billion in new debt Tuesday and emerged from the nation's second-largest municipal bankruptcy.
Jefferson County Commission President David Carrington announced the completion of the paperwork and said the commission had shown its resolve to clean up a mess it inherited from previous commissioners.
"I feel like a great weight has been lifted," Commissioner Jimmy Stephens said.
Jefferson County filed for bankruptcy in November 2011, citing more than $4.2 billion in debt, with more than $3 billion of it from sewer construction. On Nov. 21, federal bankruptcy Judge Thomas Bennett approved a plan for exiting bankruptcy. It called for creditors to reduce the debt by $1.5 billion and for the county to issue the new debt and raise sewer rates annually. The exit was conditioned on closing the sale of the new debt Tuesday.
One group is appealing the county's plan in court.
The only county commissioner who opposed the bankruptcy exit plan, George Bowman, said the county will pay $5 billion in interest on the $1.8 billion in debt over the next 40 years, and that money will come from people paying rising sewer bills.
Jefferson County's bankruptcy filing two years ago followed a string of elected officials, public employees and business people being convicted of rigging the financial transactions and sewer projects that helped put the county in so much trouble. The filing also followed court rulings striking down the county's occupational tax, which left it unable to pay its bond debt and cover ongoing services.
At the time, it was the nation's largest municipal bankruptcy, but Detroit jumped to the top spot earlier this year when it filed bankruptcy, citing $18 billion in debt.
On Tuesday, a federal judge ruled that Detroit is eligible to shed billions of dollars in debt, including the pensions of thousands of workers and retirees.