The Commonwealth Court of Pennsylvania on Friday afternoon reversed a lower court ruling and reinstated a $37.4 million lawsuit against the capital city of Harrisburg by Dauphin County related to a financially troubled trash incinerator.
The move may push Harrisburg into filing for a Chapter 9 bankruptcy petition. It is already in a state program for distressed communities, called Act 47. Harrisburg had difficulty meeting payroll and debt service costs on its general obligation bonds late in 2010.
The county had sued to force Harrisburg, which it encompasses, to pay $37.4 million owed on various notes and include the amount in the 2010 budget.
In overturning a ruling by the Court of Common Pleas of Dauphin County, Judge Bonnie Brigance Leadbetter wrote: “The county had standing to seek specific performance of the city’s obligations not only under … the Debt Act but also under the express terms of the 2007 city guaranty.
Dauphin County filed the suit on Nov. 9, 2009.
Harrisburg on Monday is scheduled to receive a fiscal recovery plan from the Cincinnati-based Novak Consulting Group.
