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Harrisburg's bankruptcy has opposition

HARRISBURG — Lawyers for the state of Pennsylvania and Harrisburg’s mayor have asked a federal judge to throw out the bankruptcy petition for the city filed this week after a divided city council voted for it.

Philadelphia attorney Neal Colton filed the state’s objections to the bankruptcy on Friday, saying a state law expressly forbids it, while Harrisburg lawyer Kenneth Lee told the court the city and Mayor Linda Thompson believe the petition is not valid.

U.S. Bankruptcy Court Judge Mary France scheduled a status conference on the case Monday morning in Harrisburg.

“No one, least of all the commonwealth, denies that Harrisburg is confronted with serious financial difficulties that must be addressed,” wrote Colton, who did not return a phone message. “That is all the more reason, however, why Harrisburg cannot afford to waste any further time and resources on this patently illegal usurpation of the commonwealth’s sovereignty.”

The law he cited was passed earlier this year to prohibit any third-class city that qualifies under state law as “financially distressed,” a description that fits Harrisburg, from filing for bankruptcy until July 2012, and that it would lose all state funding if it did.

“The commonwealth is unaware of any reported case, from any jurisdiction in the United States, in which a municipality such as Harrisburg has so brazenly disregarded an express statutory denial of authority to file a Chapter 9 petition,” Colton argued.

Mark D. Schwartz, the lawyer hired by the council to pursue the bankruptcy, said the law is poorly worded and is unconstitutional because it targeted Harrisburg in particular.

“This hardly seems to be a prohibition,” he said. “It says you shouldn’t, but if you do, this is what happens. OK, fine.”

He said a small amount of state funding is at stake.

“If that’s the penalty for filing, so be it,” he said.

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