John S. Young, the court-appointed receiver once tasked with administering Jefferson County’s sewer system on behalf of bondholders, is no longer accruing billable hours. County Commissioner Jimmie Stephens and W. Patton Hahn, Young’s lawyer, both confirmed that Young is effectively no longer on the county’s payroll.
According to The Birmingham News, Young has been paid over $1 million, at a rate of $500 per billable hour, since his appointment in September of 2010. When Jefferson County filed for Chapter 9 bankruptcy last November, Young’s authority to continue administering the sewer system was thrown into question.
Earlier this month, U. S. Bankruptcy Judge Thomas Bennett issued a ruling that greatly restricted Young’s authority. While praising Young’s performance, noting that he had discovered large numbers of customers receiving free service and demonstrated a high level of managerial skill, Bennett’s ruling stripped Young of the power to raise rates, and circumvented Young’s position by requiring the county to distribute monthly revenues directly to bondholders.
So while Young technically remains the receiver, he retains little practical control. Stephens said that he expects a final bill from Young, but nothing more afterward.
Jefferson County’s Chapter 9 filing, prompted by the county’s inability to repay $3.14 billion to bondholders, was the largest in American history. Chapter 9 bankruptcy allows municipal governments to renegotiate debt payment under judicial supervision, without risking collections or legal sanctions for non-payment.