‘Mockingbird’ Lawyer Helped Write Alabama Bankruptcy Rule

The Alabama lawyer and lawmaker whose stand against racism inspired a leading character in the novel “To Kill A Mockingbird” may have also laid the foundation for a major headache in Jefferson County’s bankruptcy case.

Amasa Coleman Lee, whose legal work led his daughter, Harper, to write about his work through the character of Atticus Finch, also helped write the Alabama law that says whether or not a municipality can file for Chapter 9 protection. Every state is required to note whether its counties and cities can file for bankruptcy—nearly half forbid it—and Lee was credited for helping write that wording in a 1930s statute.

Problem is, that language hasn’t been revisited since then.

Despite the sophistication of today’s finance deals, state lawmakers haven’t bothered to clarify the law’s fine print that says the type of existing bond debt that a county needs to have to be eligible for bankruptcy protection. That ambiguity gave Jefferson County bondholders who financed the $3 billion-plus in sewer system repairs grounds to ask the bankruptcy court to throw out the case.

Jefferson County’s debts are technically warrants and not bonds, one of the few facts that both sides can agree on in the bankruptcy case.

The 190-word statute’s unclear wording spawned a linguistics debate that lasted nearly five hours in court last December as lawyers argued back and forth over code wording that says bankruptcy protection is available to any municipality “which shall authorize” bonds.

Jefferson County could technically authorize bonds, its attorneys argued, and therefore should be eligible.

After some thought, Judge Thomas Bennett of the U.S. Bankruptcy Court in Birmingham, Ala. agreed. A 28-page memo on his decision included a section heading with the title “Tenses: Past Means Present, Present Means Past, and Both Mean Past, Present and Future.”

Bennett made his decision even as the Alabama Supreme Court has been mulling the same issue for months after a different bankruptcy judge used the grammatical reasoning to throw out the Chapter 9 bankruptcy case of Prichard, Ala., a poverty-stricken city with a costly pension plan and about 25,000 residents outside the city of Mobile.

Bennett’s memo mentioned the municipal bankruptcy case’s strange tie to classic literature.

Municipal bondholders in general try to avoid bankruptcy, fearful of how a judge may decide how their debt is treated against the backdrop of little existing case law.

Jefferson County, home to more than 650,000 residents and the city of Birmingham, filed for Chapter 9 bankruptcy in November, beginning the largest municipal bankruptcy in U.S. history.