Judge denies Harrisburg council's request for stay of receiver actions

By Jim Witters

Wilmington, Del., May 18 - A judge has denied a Harrisburg, Pa., City Council request that the actions of a state-appointed receiver be halted until the receiver is compelled to provide a full account of the reasons for his resignation from the post, according to documents filed on May 18 with the Commonwealth Court of Pennsylvania.

As previously reported, receiver David Unkovic resigned on March 30, stating that he found himself "in an untenable position in the political and ethical crosswinds and am no longer in a position to effectuate a solution."

The state is seeking the appointment of retired Air Force Maj. Gen. William B. Lynch to fill the vacancy.

But the council asked the court to halt "all activities purportedly taken" under Unkovic's receivership until Unkovic provides a full explanation under oath of the circumstances of his resignation.

In denying the council's request, Judge Bonnie Brigance Leadbetter said Unkovic's testimony is not relevant to "the limited issues before this court" at the May 24 hearing.

She left open the possibility that Unkovic could testify at a future hearing "to which Mr. Unkovic's testimony is relevant."

The city's October 2011 petition for relief under Chapter 9 of the Bankruptcy Code was dismissed on Nov. 23 in response to objections filed in the case.

The objectors claimed Harrisburg did not qualify as a debtor, citing a Pennsylvania law that was recently amended to prohibit a third-class, financially distressed city from filing bankruptcy until July 1, 2012.

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