Harrisburg Filing Tests the Boundaries of Chapter 9

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The insolvency of Pennsylvania's capital city of Harrisburg is unsurprising to anyone watching the disaster slowly unfold over the past several years. With the recent controversial filing, approved by a slim majority of the Harrisburg City Council, of a petition for bankruptcy protection under Chapter 9 of the Bankruptcy Code, the boundaries of Chapter 9 are being tested.

Aside from questions of municipal law, e.g., as to whether the Harrisburg City Council was authorized to file the petition over the objection of the mayor's office, and questions of state law, e.g., as to whether recently passed legislation barred the city's access to Chapter 9, the U.S. Bankruptcy Court for the Middle District of Pennsylvania faces a number of fundamental questions about a municipality's eligibility to file for Chapter 9.

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Published In: Administrative Agency Updates, Bankruptcy Updates, Constitutional Law 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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