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Federal judge tosses Harrisburg bankruptcy filing

HARRISBURG — A federal bankruptcy judge today dismissed the petition by the City Council of the debt-choked state capital of Harrisburg, saying it had been legally barred by state law from seeking bankruptcy protection and, in any case, had no authority to file it.

Federal bankruptcy Judge Mary France issued the ruling after hearing more than two hours of arguments by lawyers as to whether the bankruptcy petition, filed last month by a divided city council, satisfied legal issues and could move forward despite the objections of the city’s mayor, Gov. Tom Corbett, Dauphin County, bond insurers and others.

A city council member said the group will decide whether or not to appeal.

In the meantime, the Corbett administration is moving to take over many of the city’s financial operations in a bid to force it to pay down about $300 million in debt tied to the city’s ill-starred trash incinerator.

“The fight from our view is far from over,” said Neil Grover, a lawyer who co-founded the taxpayers’ group Debt Watch Harrisburg and argued in support of the bankruptcy petition. “This is the kind of issue that goes to the Supreme Court.”

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