Harrisburg, Pennsylvania officials have just announced that they will be filling for bankruptcy. They have been struggling with a very large debt problems for many years, and after failing to solve this problem, they must now file for Chapter 9 bankruptcy.
By Deborah Levine
Oct. 12, 2011, 10:36 a.m. EDT
Market Watch
NEW YORK (MarketWatch) -- Harrisburg, Penn. officials said Wednesday that the city council narrowly approved plans last night to file for bankruptcy protection under Chapter 9, according to media reports. The state capital has been struggling under $300 million in debt tied to an incinerator. Councilman Brad Koplinski said the bond insurance company Assured Guaranty Ltd. AGO +2.57% , which backed much of the city's incinerator debt, has to step up with at least $100 million in concessions to make any plan to resolve the debt work, according to a report. A spokesman for Mayor Linda Thompson said that the council's actions could accelerate the state approving a takeover of Harrisburg. Municpal bond defaults remain very low and bankruptcy filings are rare. From 1999 to 2009, only 10 rated entities failed to make debt-service payments, according to Fitch Ratings
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