UPDATE 1-Bankrupt Alabama county threatens to end workout plan
Oct 17 (Reuters) - Local legislators in Alabama's Jefferson County on Thursday passed a resolution that they will withdraw a pending plan for exiting the county's landmark $4.2 billion municipal bankruptcy unless Wall Street creditors agree to more concessions.
Four members of the county commission unanimously voted to withdraw a $1.84 billion debt-cutting plan within 15 days if the creditors fail to give concessions they say are now needed because interest rates have shot up since the workout plan was agreed in June.
The pending plan, which was approved by creditors in early October, relies on a planned $1.9 billion sale of new sewer system bonds to replace soured bonds at the heart of what had been the biggest U.S. municipal bankruptcy case until Detroit filed for bankruptcy in July.
Officials say there is now a $350 million shortfall in the pending agreement because interest rates have risen much more sharply than anticipated. A late 2013 sale of refinancing sewer warrants is planned.
Commission President David Carrington said JPMorgan Chase and other creditors had made no concessions during talks last week in New York. More talks are set for next week, Carrington told Reuters in an interview.
A spokesman for JPMorgan declined to comment on Thursday.
"If the county does not hear from creditors in 15 days, we will file a notice of termination ...," the resolution said. "We will not ask the bankruptcy court to rule on a (plan) with a $350 million gap."