Judge Throws Out Harrisburg's Ch. 9 Bankruptcy Petition

Law360, Wilmington (November 23, 2011, 7:45 PM EST) -- A Pennsylvania bankruptcy judge dismissed Harrisburg, Pa.’s Chapter 9 petition on Wednesday, clearing the way for a state takeover of the capital city and new efforts to ease its crippling debt load.

U.S. Bankruptcy Judge Mary D. France ruled from the bench that a recent Pennsylvania law temporarily barring bankruptcy for municipalities of Harrisburg’s size passed muster with the state’s constitution and, therefore, rendered the city’s filing illegal.

The judge stressed throughout arguments that the issue was narrow and purely legal. The decision does not broach...
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