City of Fairfield files for bankruptcy
The City of Fairfield, a small suburb west of Birmingham and east of Bessemer, filed for bankruptcy on Tuesday, citing millions in debt liabilities.
The City will begin Chapter 9 municipal bankruptcy proceedings at the federal bankruptcy court in Birmingham, per Bloomberg News.
Fairfield Mayor Eddie Penny told the public that the City had been suffering money issues for years, and the ongoing coronavirus pandemic accelerated the problems already being faced.
Court documents obtained by WBRC show the city’s largest creditor to be U.S. Bank, to which Fairfield owes $18 million.
The City’s many other creditors include the Fairfield Board of Education, which is owed $2 million, Jefferson County which is owed $1.7 million and Alabama Power, which is owed $1 million.
“We just need a fresh start,” Penny told WBRC.
Jefferson County Commission President Jimmie Stephens told WBRC that ongoing talks in which he has participated have mentioned dissolving the City of Fairfield into Jefferson County and merging the city with another municipality as potential options.
The City is seeking to restructure its debt.
City and county bankruptcies are rare. Reporting by The Associated Press shows Fairfield to be at least the 12th in Alabama since 1981 to file for bankruptcy. The largest municipal bankruptcy in the United States was Alabama’s Jefferson County in 2011.
“We’ve met with the officials of Fairfield and given them advice because we’ve been there and done that. This is day one of a new beginning for Fairfield,” Jefferson County Commissioner Jimmie Stephens added.