Bloomberg News

Houston Astros Owner Balks at Jefferson County Debt Inquiry

January 25, 2012

(Updates with excerpt from court papers in fourth paragraph.)

Jan. 25 (Bloomberg) -- James R. Crane, owner of the Houston Astros baseball team, asked a judge to cancel an order requiring him to answer questions about a lawsuit he settled involving his investment in the debt of bankrupt Jefferson County, Alabama.

Crane doesn’t have any personal knowledge about JPMorgan Chase & Co.’s role in $3.2 billion in defaulted debt issued by Jefferson County’s sewer system, lawyers for the investor said in court papers filed today in U.S. Bankruptcy Court in Birmingham, Alabama. The county had won permission to question Crane under oath and to exam documents related to Crane’s lawsuit against New York-based JPMorgan.

Crane settled a lawsuit against JPMorgan related to $35 million worth of county sewer warrants he purchased that later went into default. The county is also suing JPMorgan over the sewer debt and said in court documents that it may want to use any information Crane gathered against the bank, which underwrote the bonds.

Since Crane doesn’t have any personal knowledge about JPMorgan’s role, “it is harassing and unduly burdensome to require Crane to appear and testify,” his attorneys said in court papers.

Earlier this month, U.S. Bankruptcy Judge Thomas B. Bennett in Birmingham approved a request by the county to question the investor, and to review the settlement that ended his lawsuit. Bennett ordered Crane to appear at the Houston offices of his law firm to answer questions about the case.

Jefferson County filed for bankruptcy in November after the county, state officials and bondholders failed to implement a tentative agreement to reduce its $3.2 billion in sewer debt by about $1 billion, raise rates and win financial support from the Alabama state legislature.

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

--Editors: Peter Blumberg, Glenn Holdcraft

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

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


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