A county in the southern state of Alabama filed the largest ever municipal bankruptcy Wednesday, weighed down by a reported more than $4 billion in debt. The county commission of Jefferson County, which includes Birmingham, the state's largest city, made the filing in US bankruptcy court. The county cited its inability to refinance debts mostly related to the development of a sewer system.
"After over three years of diligent efforts toward regaining financial stability, the county has exhausted its options, and additional delays in resolving its financial crisis will further harm the county's prospects for recovery and future economic development," it said in the filing.
The county, home to about 660,000 people, was already in default on some obligations and has been struggling to avoid the bankruptcy filing for more than two years. The final straw came when, according to the filing, it was unable to settle with creditors on a deal on $3.1 billion in debt related to the sewer system. The bankruptcy filing listed debts near $4.1 billion for the county.