Municipal Bond Forum
What Jefferson County could have done
Q
Jefferson County’s bankruptcy was a disastrous option, but I can’t help but wonder whether they had any other options. And even if they didn’t declare bankruptcy, wouldn’t their services have deteriorated anyway because of their financial condition?
A
James A. Klotz responds:
Jefferson County had a number of opportunities to negotiate settlements with its larger creditors and insurance companies willing to contribute billions of dollars to an orderly resolution and potential refinancing.
Despite the governor’s advice to the contrary, the county commission decided the easy way out would be to file for bankruptcy and “stick it to the creditors.”
Our article, “A Cautionary Tale,” reflects the results of that decision.
Start here.
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