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Labor and Employment Law Attorney Alaine Williams Comments on the Harrisburg Bankruptcy Petition in the Pennsylvania Law Weekly

December 6, 2011

A story in The Legal Intelligencer quoted our labor lawyer Alaine Williams on a bankruptcy judge's ruling last month to toss a Chapter 9 bankruptcy petition from members of Harrisburg City Council which gives room for Pennsylvania to flex its sovereign muscles — at least over the limited number of municipalities deemed financially distressed in the state.

Williams represented AFSCME District Council 90 in its objections to bankruptcy. She said if Harrisburg were to file for bankruptcy, its ability to borrow money in the future through general obligation bonds would be "severely diminished." That is the reason most municipalities are hesitant to file, she said.

While a number of municipalities are struggling and looking to renegotiate their labor contracts, Williams said Harrisburg had the additional, unique scenario of millions of dollars in debt due to a failed trash incinerator project. The only other municipal bankruptcy in Pennsylvania occurred in Westfall Township last year. The township was hit with a $20 million judgment that far exceeded its $1.35 million annual budget. The reorganization plan was approved by a Middle District of Pennsylvania bankruptcy judge in March 2010.

Williams said it is clear that even under the receivership there will "be pain inflicted on the workers employed in the city of Harrisburg. There's no question that will happen."

Click here to read the full story from PA Law Weekly.

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