Harrisburg Bankruptcy Under Contention

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The City Council of Harrisburg, Pennsylvania’s filed for bankruptcy on Wednesday, immediately triggering a response from Govenor Tom Corbett, who argued that the filing was illegal under state law. The city was plunged into financial debt mainly due to a failed rubbish incinerator deal resulting in total debts of more than $400 million, according to bankruptcy papers. At first, a spokesman for Mayor Linda Thompson said the filing had not been made but subsequently, Mayor Thompson held a press conference denouncing the filing and labeling it “a sneak attack”.

The tussle began when the city council made its decision last Tuesday night in a 4-to-3 vote to file for bankruptcy. A lawyer for the council then faxed a petition for Chapter 9 bankruptcy to the US Bankruptcy Court and followed up with filing it in person on Wednesday morning.

The filing was opposed almost as soon as it was filed when a spokesman for Governor Corbett, Kelli Roberts, said the filing violated the state’s fiscal code, which was amended this year to prevent cities like Harrisburg from filing for Chapter 9 bankruptcy. Roberts said, “For us, this filing is illegal.”

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Published In: Bankruptcy Updates, Elections & Politics Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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