Possessives & Compound Construction [duplicate]

Neither example (the original or yours) is semantically incorrect, so any answer given here would have to be a personal opinion about which is preferred.

When answering the question of which you prefer, you must decide whether you prefer the meaning of "Father" as Fathers of the people (your example) or if you prefer the meaning of "Father" as Fathers of the town (original example). Both amount to the same thing in the end, though.

From a reading point of view, I would agree that your example "reads better" than the original. For me it is more quickly understood.

The problem is that your two sentences mean different things.

I would have gone for The fathers of everyone in town...