However, the Mayor’s office is saying that only the Mayor and Solicitor have the power to declare bankruptcy and are preparing a court battle over the actual bankruptcy.
The city, which currently owes some $483 million in debts, listed six pending lawsuits from its creditors and says that they do not have the money to repay even a portion of the debt or legal settlements. However, creditors are likely going to argue in court that the bankruptcy wasn’t in good faith, citing the city’s ability to raise revenues. They could also ask the state, who established the city, to foot the bill should the city default.
From the Associated Press:
Pennsylvania’s distressed capital city filed for bankruptcy Wednesday, citing “imminent jeopardy” from lawsuits related to a debt-saddled municipal incinerator and setting up a power struggle between the mayor and City Council.
The federal petition for Chapter 9 bankruptcy, being sought to help Harrisburg get out from under crushing debt, listed about $458 million in creditors and claims and six pending legal actions by creditors.
Read the full article here.