The problem is that they should have filed for BK back during the worst of the downturn that way it would have been a little bit excusable and it wouldn't have been as noticeable. Now the opportunity is past.
The current policy thinking (bailouts) seem to be to avoid restructuring so the senior bondholders lose nothing - not exposed to risk. This is crazy, because an investment must convey risk to both parties. The current system punishes the citizen to reward the banks/bondholders. This is not a sound social contract. BK and debt restructure must occur for BHM sewer; 4+ billion is simply unpayable with our population. I am a resident of that county, and i don't even GET sewer service.