Bloomberg News

Harrisburg Council Opposes Mayor’s Bankruptcy Vendor Filing

October 31, 2011

(Updates with excerpt from filing in third paragraph.)

Oct. 31 (Bloomberg) -- The city council of Harrisburg, the bankrupt capital of Pennsylvania, opposed a request by Mayor Linda Thompson for court approval to pay city suppliers, calling it unnecessary.

The council, a majority of whom support the bankruptcy, asked U.S. Bankruptcy Judge Mary D. France to reject Thompson’s request to give the city authority to pay its routine bills. The city controller hasn’t had any problems paying vendors, Mark D. Schwartz, the attorney for council, said in court papers today.

Thompson’s motion “is strategic and not substantive,” Schwartz said.

France will consider the motion at a hearing tomorrow. Such requests are routine in bankruptcy cases and typically granted without opposition.

Thompson and state and county officials oppose the bankruptcy. The judge set a hearing for Nov. 23 to decide whether to dismiss the case, as its opponents have requested.

The mayor requested authorization to pay suppliers last week, saying some vendors were worried about accepting payment without having the court approve the city’s authority to pay them while in bankruptcy.

Harrisburg has a population of 49,500 and is the seat of Dauphin County. It faces a debt five times its general-fund budget because of an overhaul and expansion of an incinerator, which doesn’t generate enough revenue. Guaranteed debt is about $242 million, with $65 million of it overdue, the bankruptcy petition said.

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

--Editors: Andrew Dunn, Glenn Holdcraft

To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net.

To contact the editor responsible for this story: Stephen Farr at sfarr@bloomberg.net.


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