Harrisburg, Pennsylvania, which faces a state takeover of its finances, filed for bankruptcy protection after failing to pay the debt on a trash-to-energy incinerator.
The City Council made its 4-3 decision yesterday against the advice of a city attorney who said members did not follow proper procedure. It’s this year’s ninth bankruptcy filing by a municipal-bond issuer and the first by a U.S. state capital in at least three decades, said James Spiotto, a partner at Chapman & Cutler in Chicago who tracks such cases.
“This was a last resort,” said Mark D. Schwartz, the council’s Bryn Mawr, Pennsylvania-based lawyer. “They’re at their wits’ end.”
Harrisburg is the biggest city to file for bankruptcy since Vallejo, California, in 2008, according to a ranking by Municipal Market Advisors, a Concord, Massachusetts, research firm. U.S. municipalities have been battered by the financial crisis. Harrisburg’s filing came less than a month after Alabama’s Jefferson County Commission voted to try to avert what would have been the nation’s biggest municipal bankruptcy, and nine months after Vallejo emerged.
http://www.businessweek.com/news/2011-1 ... -debt.htmlThe City Council made its 4-3 decision yesterday against the advice of a city attorney who said members did not follow proper procedure. It’s this year’s ninth bankruptcy filing by a municipal-bond issuer and the first by a U.S. state capital in at least three decades, said James Spiotto, a partner at Chapman & Cutler in Chicago who tracks such cases.
“This was a last resort,” said Mark D. Schwartz, the council’s Bryn Mawr, Pennsylvania-based lawyer. “They’re at their wits’ end.”
Harrisburg is the biggest city to file for bankruptcy since Vallejo, California, in 2008, according to a ranking by Municipal Market Advisors, a Concord, Massachusetts, research firm. U.S. municipalities have been battered by the financial crisis. Harrisburg’s filing came less than a month after Alabama’s Jefferson County Commission voted to try to avert what would have been the nation’s biggest municipal bankruptcy, and nine months after Vallejo emerged.