New York Bond Insurers Sue Alabama County over Debt

New York bond insurers sued Jefferson County, Ala. over an outstanding debt for its sewer system.

Attorneys for Financial Guaranty Insurance Co. and Syncora Guarantee Inc. filed the complaint in Birmingham federal court Sept. 16.

Those two firms have insured most of Jefferson County’s sewer bonds.

The insurers asked a judge to appoint a receiver to manage the sewer system, consider rate increases and take a number of other steps to make the county raise money to pay the $3.2 billion debt.

They say the county has defaulted on its obligation to pay the principal under the warrants.

Staff at Gov. Bob Riley’s office said he had no immediate comment on the latest development in the ongoing matter.