95 So. 3d 1
Ala.2012Background
- The Supreme Court of Alabama answers a certified question from the federal district court about Ala. Code § 11-81-3 and Chapter 9 eligibility.
- Prichard, Alabama petitioned for bankruptcy under Chapter 9 on October 9, 2009; eligibility requires state-law authorization.
- Alabama authorizes readjustment of municipal debt via refunding or funding bonds and related powers in § 11-81-3.
- Employees argue § 11-81-3 makes refunding/funding bonds a threshold condition to file under Chapter 9.
- The district court dismissed Prichard’s petition, and the City appealed to the Alabama Supreme Court.
- The question is whether § 11-81-3 limits Chapter 9 eligibility to municipalities with refunding/funding bond indebtedness.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 11-81-3 require refunding or funding bonds as a condition for Chapter 9 eligibility? | Employees: eligibility tied to bond indebtedness. | Prichard: statute authorizes readjustment for all eligible entities; no bond prerequisite. | No; statute authorizes all municipalities to proceed under Chapter 9. |
Key Cases Cited
- First Union Nat’l Bank of Florida v. Lee Cnty. Comm’n, 75 So.3d 105 (Ala.2011) (statutory interpretation and legislative intent principles)
- City of Bessemer v. McClain, 957 So.2d 1061 (Ala.2006) (statutory construction and intent; pari materia guidance)
- Ex parte Exxon Mobil Corp., 926 So.2d 303 (Ala.2005) (explains that when language is clear, there is no room for construction)
- Lambert v. Wilcox County Commission, 623 So.2d 727 (Ala.1993) (look to entire act and give words their plain meaning)
- Ex parte Waddail, 827 So.2d 789 (Ala.2001) (plain language governs statutory interpretation)