Bloomberg News

Harrisburg Mayor Seeks Dismissal of City’s Bankruptcy Case

October 14, 2011

Oct. 14 (Bloomberg) -- Harrisburg Mayor Linda D. Thompson requested an emergency court hearing to seek dismissal of the Pennsylvania capital’s bankruptcy case, saying the filing was unauthorized.

A lawyer purporting to represent the city faxed the bankruptcy petition to the U.S. Bankruptcy Court in Harrisburg at about 10:30 p.m. on Oct. 11. Late yesterday, Thompson submitted papers to the bankruptcy judge saying the petition was “filed without requisite authority” and “must be dismissed.”

Thompson said her lawyers will file a formal dismissal motion “shortly.” In the meantime, she asked the judge to set up a conference quickly to schedule an emergency motion for dismissal of the bankruptcy.

The city council voted 4-3 on Oct. 11 in favor of the Chapter 9 municipal bankruptcy. The city claims to be insolvent, unable to pay its debt, and in imminent danger of having tax revenue seized by holders of defaulted bonds.

The city is $65 million in default on $242 million owing on bonds sold to finance an incinerator that converts trash to energy, according to court papers. The bonds are insured by Assured Guaranty Municipal Corp.

Assets and debt are both less than $500 million, according to the bankruptcy petition.

The case is In re City of Harrisburg, Pennsylvania, 11- 06938, U.S. Bankruptcy Court, Middle District of Pennsylvania (Harrisburg).

--Editor: Stephen Farr

To contact the reporter on this story: Bill Rochelle in New York at wrochelle@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.


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