Receiver: Judgment for Covanta Could Bankrupt Harrisburg

The state-appointed receiver for Harrisburg warned that a summary judgment ruling for incinerator creditor Covanta Energy Corp. could push Pennsylvania's capital city to file for bankruptcy.

Judge Scott Arthur Evans of the Dauphin County Court of Common Pleas has scheduled a June 24 hearing on the motion by Covanta, which has a $22 million claim against Harrisburg.

"Covanta's attempt to move this case to judgment will frustrate the ongoing negotiations between the receiver and all major creditors of the City of Harrisburg," attorneys representing receiver William Lynch said Friday. If negotiations fail, Lynch added, "Harrisburg may file for Chapter 9 bankruptcy, which could affect the payments received by all of Harrisburg's creditors," including Covanta.

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