Bloomberg News

Alabama Sheriff Can’t Halt Lawsuits, Bankruptcy Judge Rules

January 06, 2012

(Updates with details of ruling in second paragraph.)

Jan. 5 (Bloomberg) -- The sheriff of Jefferson County, Alabama, and his deputies can’t temporarily avoid lawsuits as a result of the county’s bankruptcy, a judge ruled.

U.S. Bankruptcy Judge Thomas B. Bennett said civil rights and other suits against Sheriff Mike Hale may proceed so long as the plaintiffs understand they won’t collect any money from the county while it’s in bankruptcy. The sheriff’s department is funded by the county, which may be forced to pay the sheriff’s legal bills.

Plaintiffs who win a judgment against the sheriff will have to return to court for a separate ruling after the bankruptcy is over to collect any money from the county, Bennett said.

“Why would you want to go forward if you have to come back and re-litigate,” Bennett asked lawyers for a group of people suing the sheriff’s department?

Jefferson County filed bankruptcy last year after the county, state officials and bondholders failed to implement a tentative agreement that would have cut debt by about $1 billion.

Hale asked Bennett to determine whether the sheriff’s department is entitled to the so-called automatic stay of lawsuits granted the county when it filed bankruptcy in November.

The case is In re Jefferson County, 11-05736-9, U.S. Bankruptcy Court, Northern District of Alabama (Birmingham).

--Editors: Fred Strasser, Andrew Dunn

To contact the reporter on this story: Steven Church in Wilmington at schurch3@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.


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