Wednesday, October 12, 2011

Debt-crippled Pa. capital files for bankruptcy


HARRISBURG, Pa. (AP) -- Pennsylvania's distressed capital city filed for bankruptcy Wednesday, citing "imminent jeopardy" from lawsuits related to a debt-saddled municipal incinerator and setting up a power struggle between the mayor and City Council.

The federal petition for Chapter 9 bankruptcy, being sought to help Harrisburg get out from under crushing debt, listed about $458 million in creditors and claims and six pending legal actions by creditors.

"The city does not have the ability to pay those money judgments or any significant portion thereof and still provide health and safety services to its citizens and other essential government services," wrote Mark D. Schwartz, an attorney hired by the City Council.

A spokesman for Mayor Linda Thompson, who has resisted calls for bankruptcy because of fears that it would further blemish the city's name, said the council lacks the legal authority to seek it.

"There are procedural matters the solicitor objects to, as far as how the resolution was handled, and the quote-unquote hiring of counsel," said mayoral spokesman Robert Philbin. "The solicitor also says only the mayor, in conjunction with the solicitor, can file for bankruptcy on behalf of the City of Harrisburg."

The filing was signed by Councilwoman Susan Wilson after a 4-3 vote late Tuesday by the council to authorize it.

At a news conference, Thompson said she was hiring a law firm to challenge the bankruptcy filing, which she called a "sneak attack" by council members.

"I'm ashamed of the behavior, the road jams, the road blocks, the dishonest statements that keep coming out of four members' spirits," Thompson said.

The legal move comes the week before the state Senate is expected to take up a bill, already passed by the House, that would authorize Gov. Tom Corbett to assume many of the city's financial functions in response to the stalemate between Thompson and the council majority.

The bill would empower the governor to declare a state of fiscal emergency and install someone to make many of the critical decisions about government spending and operations.

Schwartz called the pending bill "a political grab" and said it was designed to protect bond insurers.

"You got paid your premiums, OK?" he said. "So pay your losses. This was a great lucrative game."

Municipal bankruptcies are rare, with only a few dozen filed in the United States in the past three decades, and some of those were dismissed. Among them are Orange County, Calif., which took the action in 1994, and Vallejo, Calif., three years ago.

More recently, a state receiver filed for bankruptcy for Central Falls, R.I., in August, and the recovery plan includes cost cutting, higher taxes and pension reductions. Jefferson County, Ala., is considering Chapter 9 as a solution to a $3.1 billion sewer debt problem.

The trash incinerator in question in Pennsylvania is owned by the public Harrisburg Authority -- an independent government agency with appointed members that owns the city's water and sewer systems, as well as the incinerator. Schwartz wrote that the principal amount the city has guaranteed is about $242 million, with $65 million past due.

"The magnitude of that debt is sufficiently large that it dwarfs the city's other liabilities," Schwartz wrote.

The incinerator began operating in 1972, generating steam heat for steel mills and office buildings. In the 1980s, it began generating electricity -- and cancerous chemicals. Pressure from federal environmental regulators led to its shutdown in 2003, and it didn't fully go back on line until 2008, after a costly overhaul.

The incinerator still didn't make money, even as residents paid some of the nation's highest trash disposal fees. Last year, Moody's Investors Service gave Harrisburg the lowest credit rating of any municipality that hadn't already defaulted.

That has hurt the city's ability to pay for civic improvements without huge interest rates.

Thompson has said bankruptcy would promise a further hit to the city's reputation and expensive legal fees -- but no guarantee of financial relief. She has been working to come up with a permanent plan to pay off the debt and has pressed for concessions from lenders, taxpayers, labor unions and contractors.

Philadelphia lawyer Jonathan Hugg, an expert in municipal liability, said questions about the council majority's right to file in the first place raise issues about the city's status as a state-created entity.

"Way back in the beginning, the commonwealth of Pennsylvania set up Harrisburg," he said. "I think a savvy creditor is going to argue that, having loosed this thing into the world, the commonwealth is going to be responsible if it doesn't meet its obligations."

He said creditors also may challenge whether the city's bankruptcy is in good faith, considering its ability to raise taxes.

"There's a political problem that's developed with government not being able to increase streams of revenue," Hugg said. "This is the final result."

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American Idol Achievements


Week Ending Oct. 9, 2011. Albums: Beam Me Up

Scotty McCreery's Clear As Day enters The Billboard 200 at #1. You might expect a debut album by an American Idol winner to open in the top spot, but this is the first one to do so since 2003. Kelly Clarkson, the Season 1 winner, bowed at #1 in April 2003 with Thankful. Ruben Studdard, the Season 2 champ, followed suit that December with Soulful.

The next five Idol winners made the top 10 with their first post-Idol albums, but fell short of the top spot. They were, in order, Fantasia's Free Yourself (#8), Carrie Underwood's Some Hearts (#2), Taylor Hicks' Taylor Hicks (#2), Jordin Sparks' Jordin Sparks (#10) and David Cook's David Cook (#3).

The last two winners before McCreery didn't even make the top 10. Kris Allen's Kris Allen peaked at #11. Lee DeWyze's Live It Up peaked at #19. I haven't written much in the past few years about the declining fortunes of recent Idol winners. It didn't seem to be a reflection of those artists' lack of star power so much as it was a reflection of the franchise's waning power to sell albums. But for McCreery to reverse the trend suggests that the franchise isn't out of gas just yet.

(You may have read that DeWyze was dropped by his label after just one album. This negates the original premise of American Idol-that the winner was destined for recording stardom-but it serves as a reminder of what a tough business this is for artists.)

McCreery's album sold 197K copies this week. That's the biggest first-week tally for a first post-Idol album by an Idol winner since Cook's eponymous album sold 284K in its first week three years ago. But McCreery was edged out by the most prominent runner-up of recent years. Adam Lambert's For Your Entertainment sold 198K copies in its first week in 2009.

There were signs that McCreery would have a have a big debut. His two EPs, both titled American Idol Season 10, have sold a combined total of 231K copies. His single, "I Love You This Big," has sold 630K copies.

McCreery turned 18 on Oct. 9, the last day of the tracking week. (A #1 album will be a hard birthday present to top.) McCreery is the second teen artist to reach #1 on The Billboard 200 so far this year. He follows Justin Bieber, who was nine days away from turning 17 when he hit #1 in February with Never Say Never: The Remixes.

McCreery's album also debuts at #1 on Top Country Albums. McCreery is the fourth Idol contestant to reach #1 on this chart. He follows Carrie Underwood, who topped the chart with her first three albums; Kellie Pickler, who scored with her first two albums; and Bucky Covington, who hit #1 with his first album. (Pickler and Covington both competed in Season 5. Pickler finished sixth. Covington finished eighth.)

Billboard's Keith Caulfield adds that McCreery is the youngest male artist to enter The Billboard 200 at #1 with a debut album. He takes the title from Omarion, who was 20 when O debuted at #1 in February 2005. And McCreery is the first country artist to debut at #1 with an initial studio album.

Adele's 21 rebounds to #2 in its 33rd week on the chart. The album has sold 3,885,000 copies. It has already sold more copies than any other album has sold in any calendar year in the last five years. The last albums to sell more copies in a calendar year were Mariah Carey's The Emancipation Of Mimi (4,969,000 in 2005) and 50 Cent's The Massacre (4,853,000 in 2005). 21 may well top both of those albums before the year is through. Its sales will likely swell after the Grammy nominations are announced on Nov. 30 and throughout the holiday sales season.

Tony Bennett's Duets II rebounds from #4 to #3 in its third week. This is its third week in the top five, which equals the mark set by Bennett's 2006 album Duets: An American Classic. The last Duets album to spend more than three weeks in the top five was Ray Charles' Genius Loves Company. It spent six weeks in the top five in 2004-2005.

Feist's Metals debuts at #7. It's the first top 10 album for Feist, whose 2007 album The Reminder peaked at #16. (That album has sold 735K copies.) Feist received four Grammy nominations in 2007. Two of them were for the top 10 hit "1234."

Jack's Mannequin was conceived as a side project for Andrew McMahon, the lead singer of the band Something Corporate. But a funny thing has happened. The side project has done better on the charts than the band has. Jack's Mannequin this week lands its second top 10 album. Something Corporate's highest-charting album, North, peaked at #24 in 2003.

Adele's "Someone Like You" and "Moves Like Jagger" by Maroon 5 featuring Christina Aguilera hold at #1 and #2 on Hot Digital Songs. Which will come out on top on the Hot 100? You'll find out later today when we post Chart Watch: Songs.

If you missed my Chart Watch Extra in which I listed every top 10 hit ever written by Burt Bacharach and/or Hal David, you have a second chance to read it. (They have been tapped to receive an award named after another peerless songwriting team, George and Ira Gershwin.) Here's a link.

Here's the low-down on this week's top 10 albums.

1. Scotty McCreery, Clear As Day, 197,000. This new entry sold 36K digital copies, which puts it at #1 on Top Digital Albums. Two songs from the album are listed on Hot Digital Songs. "I Love You This Big" rebounds from #181 to #83. "The Trouble With Girls" re-enters at #137.

2. Adele, 21, 112,000. The former #1 album rebounds from #3 to #2 in its 33rd week. It has been in the top five the entire time. Five songs from the album are listed on Hot Digital Songs, topped by "Someone Like You," which holds at #1 for the third week.

3. Tony Bennett, Duets II, 71,000. The former #1 album rebounds from #4 to #3 in its third week.

4. Lady Antebellum, Own The Night, 58,000. The former #1 album rebounds from #6 to #4 in its fourth week. Two songs from the album are listed on Hot Digital Songs. "Just A Kiss" re-enters at #33. "We Owned The Night" jumps from #62 to #58.

5. J. Cole, Cole World: The Sideline Story, 54,000. The former #1 album drops from #1 to #5 in its second week. Two songs from the album are listed on Hot Digital Songs. "Workout" jumps from #66 to #50. "Can't Get Enough" (featuring Trey Songz) drops from #70 to #155.

6. Lil Wayne, Tha Carter IV, 53,000. The former #1 album rebounds from #7 to #6 in its sixth week. Five songs from the album are listed on Hot Digital Songs, topped by "How To Love," which drops from #19 to #22.

7. Feist, Metals, 38,000. This new entry is Feist's first top 10 album. Her breakthrough album, The Reminder, reached #16 in 2007.

8. Rodney Atkins, Take A Back Road, 35,000. This new entry is Atkins' second top 10 album. If You're Going Through Hell hit #3 in 2006. "Take A Back Road" jumps from #32 to #17 on Hot Digital Songs.

9. Jack's Mannequin, People And Things, 31,000. This new entry is the act's second top 10 album. The Glass Passenger hit #8 in 2008.

10. Blink-182, Neighborhoods, 31,000. The album drops from #2 to #10 in its second week. "After Midnight" drops from #52 to #187 on Hot Digital Songs.

Four albums drop out of the top 10 this week. Wilco's The Whole Love drops from #5 to #11, Switchfoot's Vice Verses drops from #8 to #28, Chickenfoot's Chickenfoot III drops from #9 to #29, and Mastodon's The Hunter dives from #10 to #44.

Two rock bands from Florida debut in the top 40. Mayday Parade's Mayday Parade debuts at #12. New Found Glory's Radiosurgery bows at #26. This is Mayday Parade's highest-charting album to date.

Adele's 2008 album 19 jumps from #25 to #19. It returns to #1 on Top Catalog Albums, displacing Pink Floyd's The Dark Side Of The Moon. This is its 23rd week on top. It's far and away the #1 catalog album of the year. Among all albums, it's #27 for the year.

Mutemath's Odd Soul bows at #24. It's the rock band's second top 30 album. Armistice hit #18 in 2009.

Indigo Girls' Beauty Queen Sister debuts at #36. The folk-pop duo first charted in April 1989 with Indigo Girls. They were nominated for a Grammy as Best New Artist, but lost to Milli Vanilli (whose award was later revoked following a lip-syncing scandal). The Recording Academy opted not to give the award to the artist with the second highest number of votes. Their "winners book" simply skips over 1989. Based on longevity (an important factor in this category), Indigo Girls deserved the award. They are still charting 22 years later. How about the other nominees? Tone Loc and Neneh Cherry never returned to The Billboard 200 after their hit debut albums. (At least Milli Vanilli got back on the chart with a 1990 remix album.) Soul II Soul charted with two more albums, through 1992. I'm sure academy officials wish Indigo Girls had won the award in the first place. The award to Milli Vanilli was an embarrasing episode for the academy.

The Lost Notebooks Of Hank Williams debuts at #42. The album consists of a dozen songs that the country legend had left unfinished when he died in 1953. They were recorded by such artists as Alan Jackson, Bob Dylan, Norah Jones and Williams' granddaughter, Holly Williams. Williams and his backing group, the Drifting Cowboys, first hit the country chart in August 1947 with "Move It On Over." They first topped the country chart in May 1949 with "Lovesick Blues."

The Drive soundtrack drops from #46 to #89 in its fourth week. It's the top-ranking soundtrack for the second straight week; the top-ranking soundtrack to a theatrically-released movie for the third time in four weeks.

Paul McCartney's Paul McCartney's Ocean's Kingdom debuts at #143. McCartney is joined by John Wilson and the London Classical Orchestra on the album, which consists of four movements. This is the highest-charting of McCartney's three classical albums. Paul McCartney's Liverpool Oratorio reached #177 in 1991. Paul McCartney's Standing Stone hit #194 in 1997. The new album vaults from #58 to #3 on Top Classical Albums, behind Jackie Evancho's Dream With Me and Tori Amos' Night Of Hunters.

Real Steel was #1 at the box-office over the weekend. The soundtrack features Bad Meets Evil, Beastie Boys, Foo Fighters, 50 Cent and the Crystal Method. It sold about 1K copies, too few to make The Billboard 200.

Jackie Evancho's Dream With Me In Concert returns to #1 on Top Music Videos. It has been #1 in two of its four weeks.

Coming Attractions: Evanescence's Evanescence, the group's first album in five years, is expected to vie with Adele's album for the #1 spot next week. Five Finger Death Punch's American Capitalist will probably open at #3. Three other albums are looking at top 10 debuts: Lauren Alaina's Wildflower, Ryan Adams' Ashes & Fire and Martina McBride's Eleven. Also due: Joe Jonas' Fastlife, Johnny Gill's Still Winning, Bjork's Biophilia, A.N.T. Farm soundtrack featuring China Anne McClain and Taylor Swift's music video Journey To Fearless.


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