Chapter 9 Case for Jefferson County, AL

SIFMA provides comments to the U.S. Bankruptcy Court, Southern District, in the Chapter 9 Case for Jefferson County, Alabama.  SIFMA addresses the potential consequential market implications associated with the precedent of a court disrupting state-appointed receiver arrangements.  There are broader systemic issues related to this action.  If the bankruptcy court violates the bond indenture it would call into question security and collateral arrangements for revenue bonds generally.  One key to the viability of infrastructure financing in the United States is the assurance to those who buy revenue bonds secured by special revenues that the promise of revenue will continue under the Bankruptcy Code and will be paid even if the municipality files a bankruptcy proceeding.  A contrary ruling as proposed would have far reaching implications and SIFMA believes it prudent that the court consider those implications.