Harrisburg And Bankruptcy

October 13, 2011 by staff 

Harrisburg And BankruptcyHarrisburg And Bankruptcy, Cash-strapped city of Harrisburg Council is facing a takeover threat from state to seek protection from creditors under Chapter 9 rarely used the U.S. Bankruptcy Code.

“The city is insolvent,” it faces and 83 million in bonus payments for troubled trash incinerator, and a deficit in its operating budget, attorney Mark Schwartz wrote in the petition of the city federal bankruptcy court in Harrisburg.

The decision of the city is an attempt to pressure the bond insurers Assured Guaranty Corp. and Ambac Municipal Financial Group Inc. and other creditors to pay as much as to 100 million families in the city and 300 million or more in the outstanding debt, after a great debt of Jefferson County, Alabama, won similar concessions, Matt Fabiananlyst told clients of your company in Connecticut, Municipal Market Advisors.

The governor’s office Corbett questioned the council to declare bankruptcy. “It is a violation of the law,” said spokeswoman Kelli Roberts Angela Couloumbis my colleague, citing a provision in the state tax code, adopted in the summer, problems for cities to seek Chapter 9.

In a statement, state Sen. Jeffrey Piccola (R., Dauphin), who represents the city and suburbs, also called the move illegal.

But the punishment of the State of the Cities Harrisburg challenging and not likely to block the city to pursue your case, Alan Schankel, managing director at Janney Capital Markets in Philadelphia, he said.

“The penalty is the loss of state aid. That’s not much of a penalty” for a city in bankruptcy, he said.

“State law is clear,” the council allow Harrisburg to declare bankruptcy and seek their own solution to years of heavy debt which had been encouraged by state officials from both parties, Schwartz said.

Pennsylvania already oversees the budgets of Philadelphia, Pittsburgh, Chester, and other cities, and Harrisburg attorney had requested guidance from the state. However, the majority in the council of state rejected proposals for possible sale of city parks and parking areas and staff cuts as painful and insufficient to solve the problems of the city.

Instead, city officials proposed a new tax measures such as income tax of 1 percent of workers, including travelers. State employees living in the suburbs of Harrisburg – Piccola components – subject to this tax.

The City Council Tuesday night approved a resolution that blames the bankruptcy secured, the bond insurer, for having “insider” of the administration against the city and the effort by the state is elected by the General Assembly to pass “laws acquisition “that could force the sale of assets. Is assured “eager” to an agreement with Harrisburg and “strongly supports” Corbett and the General Assembly, she said Ashweeta Durani.

Harrisburg is not the only community in Pennsylvania in trouble for spending more than it brings in. Standard & Poors has cut the credit ratings of Northumberland County near two levels to BBB +, after local officials to reduce property taxes despite a rising deficit. Lackawanna County, which includes Scranton, suffered a similar cut last month.

“When politicians run for office and say, ‘No new taxes,” but continue to spend, that’s what can happen, Schankel said.

The Carnegie Corporation, which runs the charity created by the steel magnate Andrew Carnegie, has awarded the Pew family of Philadelphia Carnegie Medal of Philanthropy, awarded every two years for charitable donors who “believe in donating their private property to the public good. ”

Banks and Pew Charitable Trusts, which fund cultural organizations and public policy research, sharing the honor with eBay founder Pierre Omidyar, founder of Hutchison Whampoa Ltd. Li Kai-shing, and others in the ceremonies in New York next week.

Pew Charitable Trusts president Rebecca Rimel said that public recognition of the high-profile awards Carnegie was unprecedented in the history of 65 years of trusts.

Andrew Carnegie and oil magnate Joseph Pew were contemporaries who belonged in the course of business, but it is unclear to exchange ideas about the personal responsibility of the rich, Rimel said. They shared a common Presbyterian Calvinist background to some of the best-known entrepreneurs aggressive donor and charity of his time.

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