Harrisburg City Council Seeks to Reinstate Bankruptcy Appeal ...

February 25, 2012, 7:26 PM EST

By Steven Church

(Updates with hearing on plan in fourth paragraph.)

Feb. 25 (Bloomberg) ? Harrisburg, Pennsylvania?s city council asked a federal appeals court for permission to challenge the dismissal of its bankruptcy case.

Attorney Mark Schwartz asked the U.S. Court of Appeals in Philadelphia to overturn a lower-court ruling that blocked the city, the state?s capital, from appealing the bankruptcy dismissal. Two lower-court judges denied the council the chance to appeal, saying Schwartz missed a deadline.

U.S. Bankruptcy Judge Mary D. France in Harrisburg dismissed the bankruptcy on Nov. 23 and later refused to let Schwartz challenge her ruling, saying that he waited too long. Her decision was upheld by U.S. District Judge Sylvia H. Rambo, who called the effort to appeal ?potentially frivolous.?

Next week, the receiver appointed by the state to help fix Harrisburg?s financial problems will be in a Pennsylvania court seeking approval of a preliminary recovery plan. David Unkovic, chief lawyer for the Pennsylvania economic development department, filed the plan this month as part of a process set up by the state legislature.

In an e-mail, Schwartz said he also filed papers seeking to participate in the state court hearing.

Harrisburg, a city of 49,500, faces debt greater than its general fund, in part because of an overhaul and expansion of an incinerator that doesn?t generate enough revenue. Guaranteed debt is about $242 million, with $65 million overdue, according to the bankruptcy petition.

The council?s case is City of Harrisburg v. AFSCME District Council 90, 12-cv-00130, U.S. District Court, Middle District of Pennsylvania (Harrisburg). The bankruptcy case is In re City of Harrisburg, Pennsylvania, 1:11-bk-06938, U.S. Bankruptcy Court, Middle District of Pennsylvania (Harrisburg).

?Editors: Andrew Dunn, Michael Hytha

To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net

Source: http://g7finance.com/global-news/harrisburg-city-council-seeks-to-reinstate-bankruptcy-appeal/

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