Pennsylvania objects to Harrisburg Chapter 9 filing, eyes dismissal

By Caroline Salls

Pittsburgh, Oct. 14 - The Commonwealth of Pennsylvania objected to the City of Harrisburg, Pa.'s Chapter 9 bankruptcy filing and asked the U.S. Bankruptcy Court for the Middle District of Pennsylvania to dismiss the case, according to a Thursday court filing.

"Harrisburg has filed a Chapter 9 petition notwithstanding the existence of a state statute expressly forbidding it," the commonwealth said in the filing.

The commonwealth said Harrisburg does not satisfy the Bankruptcy Code requirements for eligibility as a Chapter 9 debtor.

As a result, Pennsylvania said it is seeking the immediate dismissal of the bankruptcy case, "putting a quick end to this ill-advised and transparent gambit fostered by a bare majority faction of Harrisburg's city council that has consistently obstructed the financial recovery process and whose transparent attempt to now send a message to the Commonwealth and Harrisburg's creditors represents a patent violation of existing state law."

Specifically, the commonwealth said Harrisburg failed to acknowledge that the fiscal code has been amended to specifically deny third-class financially distressed cities, including Harrisburg, the authority to file bankruptcy until July 1, 2012.

In addition, the court approved a city motion to hold a status conference on dismissal of the case on Oct. 17.

At that status conference, the city has asked the court to schedule a hearing for case dismissal. The status conference will also cover whether the city council and its attorney had the authority to make the Chapter 9 filing on behalf of Harrisburg and the harm of the filing to the city.

The city said it will also express the need for expedited procedures to resolve the reasons that the requirements for a Chapter 9 filing have not been met.

Harrisburg filed for bankruptcy on Oct. 12. Its Chapter 9 case number is 11-06938.

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