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Judge to weigh Harrisburg bankruptcy case

Oct. 17, 2011 at 4:30 AM   |   Comments

HARRISBURG, Pa., Oct. 17 (UPI) -- Harrisburg, Pa., is "tainted" and viewed now as "a joke" after a bankruptcy filing the City Council made and the mayor and state were to oppose in court Monday.

"I think there is a stigma," Corey Eckenroth, 83, told The (Harrisburg) Patriot-News. "It says you can't handle your finances."

"It's the capital of the state," lamented Alan Lemire, 49. "How does that look?"

"The rest of the country is looking at the city as a joke," he told the newspaper.

Mark Spradley, 55, said the ramifications, like the fallout from the sovereign-debt crisis in Europe, would likely be 10 years of higher taxes, diminished services and an indelible stain.

"It's going to be tainted," he told the newspaper.

In 2010, Forbes magazine rated Harrisburg the second-best place in the country to raise a family. The Daily Beast Web site ranked it No. 7 among U.S. metropolitan areas seen as recession-proof, due in part to its high concentration of state and federal government agencies.

The emergency hearing at U.S. Bankruptcy Court for the Middle District of Pennsylvania was set for 9:30 a.m. EDT Monday.

The seven-person Harrisburg City Council voted 4-3 Tuesday to seek Chapter 9 bankruptcy protection after rejecting recovery plans from the state and Mayor Linda Thompson.

Chapter is available to municipalities and other governmental entities to help them restructure debts.

Harrisburg's debts are listed in excess of $400 million, largely associated with a failed trash incinerator.

City Councilman Brad Koplinski said before the vote the recovery plans did nothing for the city of 50,000 and only protected creditors and other stakeholders of the city's debt.

The state of Pennsylvania and Thompson filed papers, arguing the council petition wasn't valid and appealing to the bankruptcy judge to dismiss it.

Koplinski argued the petition was both legal and necessary.

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