Never Heard of Chapter 9 of the Bankruptcy Code? You Will.

Posted By Cliff Tuttle | October 12, 2011

                                                                               HARRISBURG

Photo: Reuters

Yes, Harrisburg is about to make news. But not in a good way.

The City of Harrisburg filed today for protection under Chapter 9 of the Bankruptcy Code.    That’s the chapter of the code that provides for reorganization for municipalities. The most famous one was Orange County, California.

The filing is in response to the City’s default on municipal bond payments for an incinerator project and has been anticipated for some time.  Most Chapter 9 filings fail and there is talk that this one will too. Others worry that Chapter 9 filings have become a trend. Such filings are driven by creditor suits, which could lead to the garnishment of tax revenues earmarked for other purposes.

CLT

Welcome

CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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