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| Jefferson County in Alabama faces bankruptcy | Jefferson County in Alabama faces bankruptcy |
| (40 minutes later) | |
| Leaders of the largest county in the US state of Alabama have voted to file for a $4.1bn (£2.6bn) bankruptcy, the costliest US municipal failure ever. | Leaders of the largest county in the US state of Alabama have voted to file for a $4.1bn (£2.6bn) bankruptcy, the costliest US municipal failure ever. |
| Jefferson County has been struggling to avoid bankruptcy since 2008, but recent talks on a deal to restructure its crippling debt broke down. | Jefferson County has been struggling to avoid bankruptcy since 2008, but recent talks on a deal to restructure its crippling debt broke down. |
| The county sunk into debt after a costly upgrade of its sewer system. | The county sunk into debt after a costly upgrade of its sewer system. |
| Jefferson County has about 658,000 residents and is home to Alabama's largest city, Birmingham. | Jefferson County has about 658,000 residents and is home to Alabama's largest city, Birmingham. |
| The bankruptcy was approved by the Jefferson County Commission by a 4-1 vote. | |
| Announcing the vote result, Commissioner Jimmie Stephens said filing for bankruptcy would not radically change the situation in the county. | |
| "Jefferson County has, in effect, been in bankruptcy for three years," he told the Associated Press. | |
| Short of cash | |
| In September, a deal with the county's creditors, including JPMorgan Chase, had lenders agreeing to forgive about $1bn in debt, the county refinancing another $2bn, and a series of sewer rate increases. | |
| However, the negotiations remained $140m short as some terms of the deal shifted, increasing the repayment amount from $2.05bn to $2.19bn. | |
| The county's bankruptcy deal is significantly larger than the earlier record-holder of Orange County, California, which filed in 1994 with debts of $1.7bn. | |
| Pennsylvania's capital city, Harrisburg, filed for bankruptcy in October in the face $300m in debt from a trash incinerator program. Soon after, the state passed a law taking state control of the city's finances. |