The Birmingham suburb of Fairfield has become the latest local government in Alabama to file for bankruptcy, citing liabilities of as much as $10 million.
News outlets reported that the city of about 11,000 people filed for Chapter 9 bankruptcy protection on Tuesday.
Mayor Eddie Penny said the city needs a fresh start after struggling with finances for years. “It gives an opportunity to reorganize, reassess our finances,” he said.
The pandemic only worsened the city’s condition because several businesses have closed, he said, but officials have no plans to curtail municipal services or lay off employees. The city is home to U.S. Steel’s Fairfield Works, which has shrunk in size.
Al.com reported that at least a dozen Alabama cities or counties have sought bankruptcy protection over the last three decades. Fairfield is in Jefferson County, which in 2011 filed what was at the time the nation’s largest government bankruptcy ever, totaling more than $4 billion.
The city’s largest creditor was listed as US Bank, with an $18 million unsecured claim. The city owes more than $1.7 million to Jefferson County, which has since emerged from bankruptcy court.
The president of the Jefferson County Commission, Jimmie Stephens, said government officials have been discussing ways to deal with Fairfield’s problems.
“There’s talks of dissolving and going back into Jefferson County. There’s talks of merging with other municipalities. There’s talks of restructuring their debt,” said Stephens.
Republished with the permission of the Associated Press.
