Illegal Swaps Cost Bankrupt Ala. County $372M, Residents Say

Law360, New York (September 7, 2012, 3:44 PM EDT) -- A proposed class of Jefferson County, Ala., ratepayers asked a bankruptcy judge Thursday to reduce $3 billion in debt refinancing on county sewer renovations, saying a slew of banks and a law firm are liable for allegedly illegal interest rate swaps that cost the county $372 million.

In an adversary complaint, the ratepayers — led by Birmingham City Council President Roderick V. Royal — accuse The Bank of New York Mellon Corp. and JP Morgan Chase Bank NA of negotiating needless interest rate swaps while restructuring...
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