Skeletal Outline
• Jefferson County, Alabama o Two major reasons for Jefferson County’s $4 billion debt (largest before Detroit’s case) is due to sewer project and corrupt financial dealing. o Revenue are raised from residents who uses the service. o JPMorgan Chase was able to influence Jefferson County to a bond deal that had complicated terms and the ability to interest-rate swap. o With no increase in revenue as the market interest rate went up due to the swapping interest rate deal, so did the debt. Jefferson Country’s lawyers wanted to sue the banks for issuing more than $3 billion in debt that ruined by an inducement scandal. o The county agreed to close the lawsuit in exchange to the $3 billion principal reduced to $1.98 billion and …show more content…
o $125 million for Barlow Project, in which the loan went up to $441 million when done and resident did not want to pay $9,000 per person. o Was fined for $100 million for not complying with clean-air standard. o State step in to aid with the debt and defaults, in which they invested and raised revenue by selling the rights to the city’s parking garage, raising tax, cutting out service, and gaining concessions form city workers on pay and benefits
• Stockton, California o Used Chapter 9 in 2012, the city had $700 million in debt o After two years in Chapter 9, the city was able to get their voters to approve an increase of ¾ cent in sales tax o Works and retirees who had claims against the city settled a one-time payment worth of $5.1 million upfront instead of $538 million o Bondholders protests and appealed for the amounts for $37 million that was owed to them, but Judge Klein’s approved the city to reduce payment to $4 million instead. o Stockton had $3.6 trillion bond market that extends capital to cities.
• Detroit, Michigan o It would cost more to abolish abandon building and homes than leaving them standing
• Jefferson County, Alabama o Two major reasons for Jefferson County’s $4 billion debt (largest before Detroit’s case) is due to sewer project and corrupt financial dealing. o Revenue are raised from residents who uses the service. o JPMorgan Chase was able to influence Jefferson County to a bond deal that had complicated terms and the ability to interest-rate swap. o With no increase in revenue as the market interest rate went up due to the swapping interest rate deal, so did the debt. Jefferson Country’s lawyers wanted to sue the banks for issuing more than $3 billion in debt that ruined by an inducement scandal. o The county agreed to close the lawsuit in exchange to the $3 billion principal reduced to $1.98 billion and …show more content…
o $125 million for Barlow Project, in which the loan went up to $441 million when done and resident did not want to pay $9,000 per person. o Was fined for $100 million for not complying with clean-air standard. o State step in to aid with the debt and defaults, in which they invested and raised revenue by selling the rights to the city’s parking garage, raising tax, cutting out service, and gaining concessions form city workers on pay and benefits
• Stockton, California o Used Chapter 9 in 2012, the city had $700 million in debt o After two years in Chapter 9, the city was able to get their voters to approve an increase of ¾ cent in sales tax o Works and retirees who had claims against the city settled a one-time payment worth of $5.1 million upfront instead of $538 million o Bondholders protests and appealed for the amounts for $37 million that was owed to them, but Judge Klein’s approved the city to reduce payment to $4 million instead. o Stockton had $3.6 trillion bond market that extends capital to cities.
• Detroit, Michigan o It would cost more to abolish abandon building and homes than leaving them standing