Principals of the Republic Played Out in Harrisburg Bankruptcy

December 6, 2011Articles Philadelphia Business Journal

To understand the drama surrounding Harrisburg’s bankruptcy filing and its recent dismissal by the bankruptcy judge in the face of opposition from city and state officials, it is important to first understand the constitutional limits placed on government action at the federal, state and municipal levels.

While the U.S. Constitution creates federal power to enact and implement bankruptcy laws, it also reserves to state government authority to limit municipal power and limits the authority of federal bankruptcy judges to dictate terms between a municipality and its creditors. It is within these competing principles of limited federal government and restricted judicial power that the Commonwealth of Pennsylvania and the Harrisburg City Council are squaring off to determine the financial fate of the city and its creditors.

View entire article