French bank Société Générale is exiting America’s biggest municipal bankruptcy, saying that it had sold its holdings of defaulted sewer warrants issued by Alabama’s Jefferson County, Reuters reported yesterday. The bank, along with JPMorgan Chase, Bank of New York Mellon and other global financial institutions, was one of the most prominent creditors of Jefferson County when the county filed its $4.23 billion bankruptcy in November 2011, but now the bank is moving to wind up its role in court battles. Lawyers also asked that Société Générale be dropped from two appeals in the tangled and costly legal case, saying that the bank “was no longer interested in pursuing the claims that are subject of the appeal(s).” The Société Générale filings did not detail the value of the sewer warrants it had sold nor identify the buyers, though the bank filed three claims against the county of about $118 million each in 2011. Société Générale’s filings come as negotiations continue between the county, whose bankruptcy was mostly caused by soured sewer debt now valued at $3.2 billion, and some creditors may result in reductions in the value of the debt.
