Jefferson County

About Jefferson County

Jefferson County, Alabama filed for Chapter 9 bankruptcy on November 9, 2011, with 4.2 billion in debt. The crisis resulted from a sewer system upgrade that was financed with complex interest rate swap agreements. The swaps turned sour during the 2008 financial crisis. JP Morgan Chase paid 722 million to settle SEC charges that it bribed county officials to win the swap business. The bribery scheme involved payments to friends and relatives of county commissioners. The bankruptcy filing was controversial, with the Alabama governor opposing it. Jefferson County emerged from bankruptcy in December 2013 after negotiating a 1.1 billion debt reduction. Sewer rates for residents increased by approximately 300 percent over a decade. The case highlighted corruption in municipal finance.