A lawyer for Alabama's Jefferson County said yesterday that the county expects to file a plan by late June to exit its landmark $4.2 billion municipal bankruptcy, Reuters reported yesterday. The 18-month-old case is a testing ground for how bondholders would fare when a local government debtor becomes insolvent. Jefferson County, whose exit plan appears certain to be opposed in court by some creditors, looks likely to become the first big local government since the 1930s to impose losses on bondholders. "We are looking at a largely consensual plan by late June, a hearing in August, voting 30 days after approval," lawyer Kenneth Klee told a bankruptcy judge yesterday.
