Harrisburg, Pa., Seeks Chapter 9 Bankruptcy Protection Following Incinerator Overhaul
Faced with state takeover, the Harrisburg, Pa., city council yesterday evening voted to seek Chapter 9 bankruptcy protection. According to Bloomberg News, the state’s capital city of 49,500 faces a debt burden five times its general budget.
The debt is due to the city’s overhaul and expansion of a trash-to-energy incinerator, Bloomberg reports, which doesn’t generate enough revenue. Brad Koplinski, a city councilman, told the Patriot-News that Assured Guaranty Municipal Corp., which backed much of the city’s incinerator debt, should guarantee at least $100 million in concessions.
The city council voted 4-3 to hire Bryn Mawr sole practitioner Mark D. Schwartz, to fight the proposed state takeover and file for bankruptcy protection. He told the Patriot News that he asked the governor’s general counsel for a meeting to discuss alternatives to state takeover, and the request was nixed.
Schwartz also noted that the general counsel, Steve Aichele, previously practiced with Saul Ewing, a law firm that represents Assured Guaranty.
“They were paid a fee to take a risk. And what this whole thing is about, the lawsuits and the takeover legislation is all about their getting priority over the other creditors,” he told the newspaper. “The governor hasn’t brought 10 cents to the table. Nor the state senators, nor any of the legislators.”
