A federal judge late Tuesday afternoon denied an appeal by the Harrisburg, Pa., City Council of a ruling that invalidated its bankruptcy filing.
Mary France of the U.S. Bankruptcy Court for the Middle District of Pennsylvania in Harrisburg, who nullified the Chapter 9 filing on Nov. 23, said Tuesday that the City Council’s appeal came after the allowable 14-day window.
Three weeks earlier, she upheld a new amendment to the state’s fiscal code that restricts financially distressed cities from filing under Chapter 9 until next June 30. She also declared the council’s actions illegal without the approval of Mayor Linda Thompson.
“Regrettably, another door closes on Harrisburg,” said Mark Schwartz, the Bryn Mawr, Pa., attorney representing the council.
Schwartz filed the appeal last Saturday in U.S. District Court. Also last weekend, he had requested an extension of the deadline for filing, citing delays in France’s written ruling. The judge ruled orally in court and issued a written version Dec. 5.
Pennsylvania’s capital city is at least $300 million in debt and has skipped about $60 million in bond payments related to an incinerator retrofit project. Gov. Tom Corbett named attorney David Unkovic, former chief counsel for the state’s Department of Community and Economic Development, as the city’s receiver. Unkovic has a month to craft a financial recovery plan.
Schwartz said Harrisburg will continue to struggle unless the state implements property tax overhaul. “The governor can sell sidewalks until the end of the day, but unless there’s a revenue source, the numbers won’t work,” he said. “Where’s the city eventually going to wind up? In bankruptcy.”
