Wednesday, October 12, 2011

Capital of Pennsylvania Files For Bankruptcy

Harrisburg, capital of Pennsylvania, is the latest U.S, city to file for bankruptcy. City council passed a resolution on Tuesday night authorizing a Chapter 9 bankruptcy filing..

The Pennsylvania state capital faces a $300 million debt crises tied to a project to "revamp its incinerator and has been plagued with cash flow problems".

Mark Schwartz, the council's attorney in this matter, said that the bankruptcy filing would give the city "bargaining power" with its creditors and with the state.

"They were tired of being humiliated and denigrated," he said of the council members who voted for bankruptcy on Tuesday.

Chapter 9 is "a much better forum if you really want to address the financial problems of the city,".

Meredith Whitney must be rejoicing.

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