Bank of America Corp. sold most of the $225.7 million worth of defaulted sewer bonds it held and dropped out of a court case related to the bankruptcy of Jefferson County, Ala., Bloomberg News reported today. The second-biggest U.S. bank said in a court filing last week that two of its units would no longer participate in the appeal of a bankruptcy court ruling that stripped bondholders of control over Jefferson County's sewer system. One unit, Bank of American N.A., sold all of the $65.7 million in bonds it held. The other, Blue Ridge Investments LLC, sold most of the $160 million in bonds it held, according to court records. The decision by Charlotte, N.C.-based Bank of America leaves other bondholders and bond insurers, including Assured Guaranty Municipal Corp., to fight the ruling on their own. Bondholders are owed more than $3 billion related to sewer system improvements.
