Article “Emergency manager: Detroit won’t pay $2.5B it owes” reports:
“A team led by a state-appointed emergency manager said Friday that Detroit is defaulting on about $2.5 billion in unsecured debt and is asking creditors to take about 10 cents on the dollar of what the city owes them.
“Kevyn Orr spent two hours with about 180 bond insurers, pension trustees, union representatives and other creditors in a move to avoid what bankruptcy experts have said would be the largest municipal bankruptcy in U.S. history…
“Orr also announced that Detroit stopped paying on its unsecured debt Friday to “conserve cash” for police, fire and other services in the city of 700,000 people. The debt not being paid includes $39 million owed to a certificate of participation…”
That is what City of Harrisburg and its Waste Authority should be doing. But Gov. Tom Corbett is trying to ‘move heaven and earth’ to prevent creditors for $350 million in debt from taking a big loss. Part of the scheme is to sell the environmentally challenged and accident prone Harrisburg incinerator to the Lancaster County Solid Waste Disposal Authority at a cost of over $150 million, three times apparent market value. ($45 million was LCSWDA’s original bid and the only other bidder drop out.)
The creditors would likely show their gratitude to Corbett in the way of campaign contributions, as did the Marcellus Shale drillers who have avoided a state extraction tax and the Second Mile Foundation sponsors during the time when its founder Jerry Sandusky was “slow walked” by Corbett as attorney general.
As the only bidder, we cannot understand why LCSWDA would want to pay a price equal to its total net worth now when later the incinerator could be purchased for a fraction of the cost through a bankruptcy court, hopefully without acquiring the adjoining ‘mountain’ of potentially toxic ash residue dating back forty years.
