Debt-crippled Pa. capital files for bankruptcy
Bankruptcy
Pennsylvania's distressed capital city filed for bankruptcy Wednesday, citing "imminent jeopardy" from lawsuits related to a debt-saddled municipal incinerator and setting up a power struggle between the mayor and City Council.
The federal petition for Chapter 9 bankruptcy, being sought to help Harrisburg get out from under crushing debt, listed about $458 million in creditors and claims and six pending legal actions by creditors.
"The city does not have the ability to pay those money judgments or any significant portion thereof and still provide health and safety services to its citizens and other essential government services," wrote Mark D. Schwartz, an attorney hired by the City Council.
A spokesman for Mayor Linda Thompson, who has resisted calls for bankruptcy because of fears that it would further blemish the city's name, said the council lacks the legal authority to seek it.
"There are procedural matters the solicitor objects to, as far as how the resolution was handled, and the quote-unquote hiring of counsel," said mayoral spokesman Robert Philbin. "The solicitor also says only the mayor, in conjunction with the solicitor, can file for bankruptcy on behalf of the City of Harrisburg."
The filing was signed by Councilwoman Susan Wilson after a 4-3 vote late Tuesday by the council to authorize it.
At a news conference, Thompson said she was hiring a law firm to challenge the bankruptcy filing, which she called a "sneak attack" by council members.
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