JPMorgan Chase & Co. (NYSE:JPM)-Federal Judge delays bankruptcy hearing

Posted In Markets - By Jason Adkins On Monday, November 4th, 2013 With 0 Comments

A judge in a Federal court has pushed back the hearing of a bankruptcy case involving Jefferson County, Ala.’s. The leaders in the county had squeezed out $300 million in breaks from its lenders saving the deal which will get the county out of Chapter 9 by end of the year. On Thursday Judge Thomas Bennett postponed the county’s confirmation hearing to Nov. 20, giving its leaders more time to complete a fresh loan repayment agreement which will give them even bigger breaks on the $3.1 billion the county took as loans from the banks to fix its old sewer system.

The delay of 8 days gives bankers on Wall Street to sell over $1.7 billion in municipal bond debt, which the county has promised to pay over years after coming out from the second-largest municipal bankruptcy in the history of the U.S.

In the week, leaders of the county have been negotiating and have got cuts from Bond Holders like JPMorgan Chase & Co.(NYSE:JPM), hedge funds, bond insurers and other groups after the leaders said that the spring settlement would not work any longer work as there was a weak municipal bond market. The interest rates of municipal bond have risen gone up since the earlier deal was announced in June.

The larger bond market had started selling in May after the Federal Reserve had announced that it could reduce its bond-buying program. The moves in the municipal market worth $3.7 trillion had gone up in the summer, after Detroit filed its record bankruptcy and there were worries about Puerto Rico’s finances.

 In the new agreement that was announced recently Jefferson County Commission President David Carrington said that J.P. Morgan was going to bear the major share of the cuts. The company had earlier agreed to forego $840 million in debt and now will forego another $100 million.

About the Author

- Jason Adkins provides in-depth ground reports on round up the day’s business and financial market news and include keynote interviews with major business players and updates on Asian, European and US stock markets. Jason has interviewed heads of leading European banking institutions such as European Central Bank President Jean-Claude Trichet and HSBC Chairman Stephen Green, and CEOs from the business world including Microsoft founder Bill Gates, Virgin Chairman Sir Richard Branson and former Porsche President and CEO Dr Wendelin Wiedeking.

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