A federal judge has ruled that a group of sewer customers can continue their appeal of Jefferson County's bankruptcy exit plan and says that she legally could scrap the schedule for future sewer rate increases called for under that plan, the Birmingham (Ala.) News reported today. U.S. District Court Judge Sharon Blackburn issued an order on Tuesday regarding a request by Jefferson County officials to dismiss most of the claims in the lawsuit that challenge the county's bankruptcy exit plan. A bankruptcy judge had confirmed the plan, allowing the county to exit its $4.23 billion bankruptcy last year. Jefferson County officials had argued that since the plan has already been executed, with refinance of its debt with new bond holders, the plan can't be reversed. Blackburn disagreed. "The fact that the (bankruptcy) Confirmation Order has taken effect — the new sewer warrants have issued and the old sewer warrants have been retired — does not extinguish the controversy, although it may limit the scope of relief available" to sewer customers, she wrote. Blackburn's order does not change anything about the exit plan, just allowing the appeal to go forward before her. The judge in her order, however, agrees there may be some parts of the bankruptcy judge's confirmation order approving the plan that may be impossible to reverse. But the plan for the future sewer rate increases isn't one of them, she states.
