Banks, insurer sue Pennsylvania capital city over incinerator debt as bankruptcy threatens

Bankruptcy looming, Pa. capital sued over debt

HARRISBURG, Pa. — Pennsylvania’s financially troubled capital city is being sued over debt that threatens to drag it into bankruptcy.

The Patriot-News of Harrisburg says the two lawsuits were filed Monday in an effort to force the city to make payments on debt tied to the problem-plagued renovation of its trash incinerator.

Mayor Linda Thompson says the city doesn’t have the money to make the installment payments and that she is trying to negotiate a new payment plan.

TD Bank filed one suit seeking payment of nearly $35 million due Dec. 15. The bank joined a second suit with M&T Bank and Assured Guaranty to recoup millions in missed debt payments.

TD and M&T banks are trustees for bondholders. Assured Guaranty is an insurer.